Tenix Defence Systems Pty Ltd v AFMEP&KI Union [1999] VSC 40

8. Of the employees employed directly by the plaintiff, 194 are fixed term or "period employees". These employees are engaged for a fixed period of time pursuant to the individual contracts of employment. Most non-salaried employees of the plaintiff are members of the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (A.M.W.U.) or the Australian Workers Union (A.W.U.). Some are employed by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (C.E.P.U.).

11. The plaintiff, the A.M.W.U., the A.W.U., the C.E.P.U., members of the A.M.W.U., A.W.U. and C.E.P.U. and employees of the plaintiff employed at the Williamstown Shipyard are parties to the Tenix Defence Systems Pty Ltd Certified Agreement 1998-2001 (the certified agreement) and the Tenix Defence Systems Pty Ltd Award 1998-2001 (the award). On 20 January 1998 the agreement was certified by Commissioner Simmonds of the Australian Industrial Relations Commission under the provisions of s.170LT of the Workplace Relations Act 1996.

14. One clause of the agreement relevant for present purposes is clause 15 which reads:

"15. Disputes Resolution Procedure 15.1 It is a condition of employment and a fundamental requirement of this Agreement that this sub-clause be observed in its entirety.

In the event of any grievance or of any major change in employment conditions or Agreement terms, or in the event of any dispute between The Company and its employees, the parties will consult together to reach settlement without loss of wages or production provided always that work shall continue in the usual manner without bans and limitations on the performance of work whilst the steps below are followed.

a. The grievance or dispute shall, in the first instance, be pursued between the employee or employees concerned and the immediate supervisor and if required, the relevant Shop Steward.

b. If the matter is not resolved, then discussion should be conducted with senior management and if appropriate, the local accredited Shop Steward of the Union(s) concerned and the relevant State Union Official.

c. If the matter is still not settled, then a conference shall be held between a Federal Official of the Union(s) or its nominee together with the Shipyard's General Manager or his/her appointed nominee.

d. If the matter cannot be settled by a conference between the parties, The Company and/or the Union(s) may apply to the Australian Industrial Relations Commission which shall endeavour to resolve the issue between the parties by conciliation.

15.2 There shall be a commitment by the parties to achieve adherence to the above procedure. This shall be facilitated in the first instance by the earliest possible advice by one party to the other of any issue or problem which may give rise to a grievance or dispute.

15.3 Reasonable time limits shall be allowed for the completion of the various stages of the discussions, with at least seven (7) calendar days being allowed for stages (a) to (d) (inclusive) of the discussions to be finalised.

15.4 No party shall be prejudiced simply by the fact that work continued whilst the above process was being followed.

15.5 This procedure shall not prevent Tenix or the Union(s) from making direct representations to one another or on any matter giving rise to or likely to give rise to a dispute or grievance."

27. On 2 December 1988 officers of the plaintiff met with representatives of the A.M.W.U. At that meeting the representatives sought a commitment from the plaintiff that it would provide all of its 194 period employees with permanent positions at the expiry of their fixed-term contracts. The officers of the plaintiff informed the representatives of the A.M.W.U. that the plaintiff was in the process of reviewing its production schedule and labour requirements, and was not able to give such a commitment at that time. The officers of the plaintiff undertook to meet with representatives of all the relevant unions to discuss converting period employees to permanent employees in the middle of February 1999 once the company had completed its review.

30. Some time in January 1999 it was agreed between the parties that the meeting in question would be held on 11 February. On Wednesday 27 January 1999 the labour resources manager of the plaintiff notified Cahill Mechanical Industries (C.M.I.) that it required a reduction of 25 in the number of pipe fitters to be contracted to the plaintiff at the Williamstown Shipyard.

33. On the morning of Thursday 28 January an official of the A.M.W.U. told officers of the company that he wanted the 25 contractors that were to be terminated by C.M.I. to receive payment in lieu of notice from C.M.I. An officer of the plaintiff told the official (inter alia) that the employees belonged to C.M.I. and not the plaintiff, and that it was up to C.M.I.. Whereupon the official is alleged to have replied: "I am going to involve Tenix in this. We will be calling a meeting. Don't be surprised if we put on a picket."

36. There were further meetings during the course of 28 January between officers of the plaintiff and officials of the A.M.W.U.

39. At 11 a.m. a meeting of the A.M.W.U. members was held in the canteen.

42. At 12.25 p.m. an officer of the plaintiff met with officials of the A.M.W.U. He was informed that the members had passed the following resolution:-

"This meeting of Tenix workers directs the A.M.W.U. Victoria Branch to negotiate immediately with Tenix in relation to:

Tenix workers will cease work to allow talks to happen and await a further report from the officials today."

50. The officers of the plaintiff informed the officials(inter alia) that the plaintiff would not be negotiating whilst its employees remained off the job. There was then a further meeting of employees and at 2.30 p.m. an officer of the plaintiff was told by officials of the A.M.W.U. that the members had passed the following resolution:-

"All of the short-term employees are to be put on permanent and on the same date. Any future term employees to be through a contractor like C.M.I. The A.M.W.U. members are on strike and will return to work at 7.00 a.m. tomorrow. There will be a report-back meeting at 12.30 p.m."

54. There was then a meeting of the A.M.W.U. members of C.M.I.

57. At approximately 3.30 p.m. all the plaintiffs and C.M.I.'s employees who were members of the A.M.W.U. and the A.W.U. left the Williamstown site.

60. On the following morning there was a discussion between officers of the company and officials of the union. It was put to the officers that the plaintiff had banned overtime. The officials were told that when the employees withdrew their labour the company did not offer overtime. At that, one official is alleged to have replied: "Maybe we should ban overtime altogether."

63. Around lunch-time there was a meeting of A.M.W.U. members employed by the plaintiff. At approximately 1.30 p.m. officers of the plaintiff were told that the meeting had passed the following resolution: "Gone home for the rest of the day. Back on Monday morning with an overtime ban on. Will meet again some time Tuesday."

66. At about that time all A.M.W.U. and A.W.U. members employed by the plaintiff left the site. At approximately 2.00 p.m. all C.M.I. employees left the site.

69. Normally overtime is worked over the weekends. No overtime was worked on Saturday 30 and Sunday 31 January.

72. All employees returned to work on Monday 1 February 1999. That same day the plaintiff caused the Australian Industrial Relations Commission (the Commission) to be notified of the fact that there was an industrial dispute between it and the A.M.W.U. and the A.W.U. The notification was given pursuant to s.99 of the Act.

75. On Tuesday 9 February 1999 there was a hearing of the notification before Commissioner Simmonds. The proceeding was held both on and off the record. At the conclusion of the hearing the Commissioner made (inter alia) the following recommendation:

"I recommend that the A.M.W.U. and the A.W.U. each convene a meeting of their members (or a single joint making if that is agreed to) for the purpose of considering the following proposal: That before taking any industrial action about a matter that is being processed through the resolution of dispute procedure the A.M.W.U. will provide the company with a reasonable time in which to apply to the Commission pursuant to clause 15.1(d).

If adopted, such a proposal will provide a cooling-off period."

80. Clause 15.1(d) provides that if a dispute cannot be settled between the parties, the parties may apply to the Commission and the Commission shall then endeavour to resolve it by reconciliation.

83. On Friday 5 February 1999 the plaintiff's solicitors filed in the Commission a notice of intention to take action in tort against the A.M.W.U. and one of its officials. The notice was filed pursuant to s.166A of the Act.

86. The application was heard by Commissioner Simmonds on Saturday 6 February and Sunday 7 February. Again, the hearing was partly on the record and partly off the record. During the course of the hearing on the Sunday, representatives of the A.M.W.U. agreed to recommend a resolution to their members in the following form:-

"Industrial action in relation to matters in dispute is ceased. We will meet on Friday to hear a report back on the outcome of Thursday's meeting with management."

91. On Monday 8 February the members of the A.M.W.U. employed by the plaintiff passed the following resolutions.

1. Industrial action in relation to matters in dispute is ceased. We will meet on Friday to hear a report back on the outcome of Thursday's meeting with management.

2. That before taking any industrial action about a matter that is being processed through the resolution of dispute procedure the A.M.W.U. will provide the company with a reasonable time in which to apply to the Commission pursuant to the clause 15.1(d)."

96. On Tuesday 9 February the members of the A.W.U. employed on the site passed the following resolution:

"That before taking any industrial action about a matter that is being processed through the resolution of disputes procedure, the A.W.U. will provide the company with a reasonable time in which to apply to the Commission pursuant to Clause 15.1(d)."

100. Work proceeded normally at the shipyard on Tuesday and Wednesday.

103. On Thursday 11 February there was a meeting between officers of the plaintiff and officials of the A.M.W.U. and the A.W.U. At that meeting an officer of the plaintiff told the officials that all period employees would be given permanent employment once their contracts had expired and continuity of employment would apply for their entire period of service with the company. Union officials then sought a commitment that the plaintiff would convert the period employees on a quarterly basis commencing on 1 March 1999, but the officers of the plaintiff responded that that was not possible.

106. At 1.30 p.m. that day the A.M.W.U., the A.W.U. and the C.E.P.U. held separate meetings of their members. The plaintiff was later advised that the offer was unsatisfactory and that the A.M.W.U. members would go home until 7.00 a.m. on Tuesday 16 February. Later that day the plaintiff was advised that the A.W.U. members would be supporting the A.M.W.U.'s industrial action.

109. On Friday 12 February the A.M.W.U. and the A.W.U. members did not attend the site. However, the C.E.P.U. members did.

112. Later on 12 February there was a further hearing before Commissioner Simmonds following which Commissioner Simmonds issued a s.160A certificate in respect of the A.M.W.U., opening the way for the plaintiff to institute proceedings in tort against it.

115. At 7.00 a.m. on Tuesday 16 February all employees resumed work. It should be noted that Monday was a rostered day off in any event.

118. On that same day the plaintiff filed a writ in the court naming as defendants the A.M.W.U., the A.M.U. and three union officials. By its writ the plaintiff seeks injunctive relief and damages. At the same time the plaintiff filed a summons in the court by which it seeks the following interlocutory relief: -

"1. An injunction restraining the Defendant and each of them whether by themselves, their servants or agents from directing, procuring, persuading, advising or authorising members of the first and fourth defendants to:

(i) stop performing the work at the Williamstown Shipyard which their respective contracts of employment with the Plaintiff require; or.

(ii) perform work at the Williamstown Shipyard otherwise than in accordance with their respective contracts of employment with the Plaintiff.

2. The first and fourth Defendants by their offices, delegates, servants or agents send by prepaid mail a letter to each of their members employed by the Plaintiff informing those members of the terms of the Order and recommending that they forthwith cease and desist from industrial action and perform the work which their contracts of employment require them to perform."

126. It must be remembered that the account I have given thus far is by no means complete. What I have endeavoured to do is no more than set out the background to the dispute and the more salient features of it.

129. When the application first came before me on Wednesday last, Mr Hinkley who appears for the defendants submitted that I could not make any orders against the A.W.U. because the plaintiff's endorsement on the writ not only seeks injunctive relief but damages and as a commissioner of the Commission has never issued a section 160A certificate in respect of the A.W.U., the court has no jurisdiction to entertain that aspect of the plaintiff's application.

132. A similar argument was advanced to me in Patrick Stevedore No. 1 Pty Ltd and Anor. v. Maritime Union of Australia and Ors. (1998) 79 I.R. 268. In that case a Commissioner had issued a certificate in respect of the behaviour of a union and its officials at Webb Dock. In the endorsement on the writ the plaintiffs had filed in the court, they had complained about the behaviour of the union and its officials at both Webb Dock and at East Swanston Dock. It was argued that for that reason I had no jurisdiction to entertain the plaintiff's claim for injunctive relief.

"I reject those contentions and I do so for the following reasons. If Patricks have no entitlement to take action against the union, its officials and members in relation to their behaviour at the East Swanston Dock, and I make no finding one way or the other in relation to that matter, it does not follow that the Court has no jurisdiction to hear that aspect of the action in respect of which the Commission has given its certificate. At this stage Patricks have done no more than file a writ in the proceeding bearing their endorsement of claim. Their statement of claim when delivered may well be confined to the events which occurred at Webb Dock only. If their statements of claim relates to events which have occurred at both docks, it would be open to the court to deal with those aspects of the claim relating to Webb Dock and refuse to deal with those aspects of the claim relating to East Swanston Dock on the ground that it has no jurisdiction to entertain them. If the Court has jurisdiction to deal with Patricks' claim in so far as it relates to the events which have occurred at Webb Dock, as I am satisfied it has, then in my opinion that action can be the vehicle by which Patricks make their application for injunctive relief. The application for injunctive relief is not an action in tort under the law of the State of Victoria. It is an application seeking that the Court exercise its equitable jurisdiction to prevent the union and certain of its officials committing the tort of intentionally interfering with the performance by the members of the union of their contracts with Patricks. If Patricks had issued a writ seeking no more than injunctive relief, I would have no hesitation in concluding that the Court has jurisdiction to entertain the present application. That was the view taken of the matter by Kearney J in Australian Broadcasting Corporation v. Australian Public Sector and Broadcasting Union [1991] A.I.L.R. 166 and it is a view with which I respectively agree."

139. In the present case the plaintiff has done no more than file a writ in the Court bearing its endorsement of claim. It may well be that when its statement of claim is delivered there will be no reference in it to a claim for damages against the A.W.U. If there is, the Court may well refuse to deal with it. But, as I pointed out in Patricks, an application for injunctive relief is not an action in tort, it is an application for equitable relief. In my opinion, the point raised cannot be sustained.

142. When the hearing before me resumed on Thursday morning, Mr Hinkley proffered an undertaking to the Court on behalf of the defendants in the following terms:-

(a) not to engage in or agitate for or support industrial action at the employment site, namely the Williamstown Shipyard, in relation to the matters agitated in these proceedings for a period of 7 days from this day to enable the parties to engage in negotiation and/or conciliation before the Australian Industrial Relations Commission; and

(b) that the A.M.W.U. and the A.W.U. will apply to the Commission in relation to the matters agitated in these proceedings."

149. If I acceded to that suggestion, the further hearing of this application would be adjourned for a period of 7 days.

152. The proposal was opposed by Mr Parry who appears for the plaintiff, primarily on the following grounds:-

1. By virtue of the provisions of s.170MN of the Act the defendants are forbidden from taking industrial action until after the certified agreement expires. The defendants' undertaking therefore is no more than an undertaking not to break the law.

2. That the breaches of the agreement and s.170MN have been blatant and are not challenged by any evidence on the part of the defendants.

3. The wildcat strike action has caused and will cause significant loss to the plaintiff, both economically and in terms of its reputation.

4. That on 11 February the members of the A.M.W.U. and the A.W.U. went on strike without notice as required by Commissioner Simmonds.

5. That the existence of an injunction of the nature sought will not cause any detriment to the defendants and will in no way inhibit any further negotiations and/or conciliation.

160. I am mindful of the force of Mr Parry's contentions, but I am also mindful of the fact that it is only as a last resort that this Court will become involved in a dispute between an employer and its employees concerning conditions or terms of the employee's employment. The view has been expressed by a number of judges of this Court, including myself, that, wherever possible, it is desirable that such disputes be resolved by negotiation between the parties and if such negotiation is unsuccessful by the Commission. It must be remembered that the Commission is a specialist body established for that and of course other purposes. Nevertheless, if of course the circumstances of a particular case justify the intervention of this Court, this Court will not hesitate to step in and make whatever orders it considers are appropriate. In that regard see National Workforce Pty Ltd v. Australian Manufacturing Workers Union (1998) 3 V.R. 265.

163. Having considered this matter overnight I am of the opinion that it is appropriate to accept the undertakings on behalf of the defendants but in a slightly different form. I have arrived at that conclusion for the following reasons.

(1) The workforce has now returned to work at the Shipyard and pursuant to the undertakings I propose will continue to do so uninterrupted until 4 p.m. on Monday 1 March next. When I use the word "uninterrupted" I mean no more than that they will work such hours and perform such overtime as they normally do. In that situation the plaintiff will suffer no further loss over the period of time in question.

(2) The dispute between the parties concerning the period employees seems to me to be one eminently capable of resolution. I consider that if a little goodwill is demonstrated on all sides, the parties should be quite capable of reaching agreement in the matter.

(3) To impose an injunction whilst there is a genuine prospect of agreement being reached, as I believe to be the case, cannot but have the effect of inflaming the situation, particularly so far as the union members are concerned. No matter what the rights or wrongs of their behaviour over the past three weeks might be, their unions and representatives have now shown a desire to negotiate and I consider that it is appropriate that they be given the opportunity to do so.

169. I would wish the undertakings to be varied so that they are in the following form.

(1) "Until 4.00 p.m. on Monday 1 March 1999 the defendants will not engage in or agitate for or support industrial action at the employer's site, namely the Williamstown Shipyard, in relation to the matters agitated in these proceedings to enable the parties to engage in negotiations and/or conciliation before the Australian Industrial Relations Commission; and (2) that as soon as practicable the first defendant and the fourth defendant will apply to the Commission in relation to the matters agitated in the proceeding and will abide any reasonable directions of the Commission as to the conduct of the negotiations and/or conciliation."

173. If undertakings in that form are given to me on behalf of the defendants I will simply adjourn the further hearing of the application to Monday, 1 March. I will leave the Bench and if you would be good enough to take the matter up with those instructing you and your client.

MR HINKLEY: I am instructed to give those undertakings.

180. Very well. The further hearing of this application is adjourned to Monday, 1 March. I reserve liberty to the parties to apply and I reserve the costs of the application.