Webb, J.M. v. Nationwide News Pty Ltd [1985] FCA 164

Conciliation and Arbitration Act. Such an information is

triable summarily by a single judge of this Court: Conciliation and Arbitration Act ss. 104(2) (a), 118A.

"5. (1) An employer shall not dismiss an employee, or injure him in his employment, or alter his position to his prejudice, by reason of the circumstances that the employee

(a) is or has been, or proposes, or has at any time proposed, to become an officer, delegate or member of an organisation, or of an association that has applied to he registered as an organisation; or .

(d) being a member of an organization which is seeking better industrial conditions, is dissatisfied with his conditions; or

(f) being an officer, delegate or member of an organization, has done, or proposes to do, an act or thing which is lawful for the purpose of furthering or protecting the industrial interests of the organization or its members, being an act or thing done within the limits of authority expressly conferred on him by the organization in accordance with the rules of the organization.

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Penalty: $400. .. (3) A reference in this section to an organization

shall be read as including a reference to a branch of an organization.

this section, if all the relevant facts and circumstances, other than the reason or intent set out in the charge as being the reason or intent of an action alleged in the charge, are proved, it _lies upon the person charged to prove that that action was not actuated by that reason or taken with that intent.

(5) Where an employer has been convicted of an offence against this section the court by which the employer is convicted may order that the employee he reimbursed any wages lost by him and

May also direct that the employee be reinstated in his old position or in a similar position."

Mr Webb has established, it being either common ground between the parties or a matter of no active dispute, that he was dismissed from the employment of the defendant on 21 September 1982, that he was at that date a member of the Australian Journalists Association ("the AJA") and that the AJA was, at all material times, a registered organization

under the Conciliation and Arbitration Act. The other ingredients of the various offences provided by paras (a), (d)

and (f) of s.5(1) are in active dispute between the parties.

Particulars of the allegations made in the information were sought and supplied. The informant claims that, at the date of his dismissal by the defendant, he

occupied three positions with the AJA: vice president of the

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New South Wales branch, member of the branch committee, and member of the News Limited sub-committee -- generally referred to as the News Limited "house committee" -- and that any of these positions was enough to constitute him both an "officer" and a "delegate" of the organization; bearing in mind that subs (3) provides that a reference in the section to an organization includes a reference to a branch of the organization. The defendant contests the claim that the informant was an "officer" or a "delegate". Although each of the three relevant paragraphs refers to a "member" of an organization -- either solely or as an addition to "officer" and "delegate" -- and membership is proved, it is necessary to determine Mr Webb's status for the purpose of considering whether the various activities upon which he was engaged prior to and at the time of his dismissal and which, upon his casé, were the cause of his dismissal were activities within the limits of the authority conferred on him by the organization in accordance with its rules. I will deal with this matter

later when I summarize the evidence relating to Mr Webb's

employment with the defendant and his union involvement during

The primary issue in the case is the reason for the prosecutor's dismissal. Although the information relies, as one alternative, upon the mere fact of Mr Webb's membership of the AJA, under para (a) of s.5(1), it is clear that Mr Webb

was not dismissed simply because he was a member of the union.

As one would expect, the evidence indicates widespread membership of the AJA amongst the journalists employed by the defendant and its associated companies within the News Limited group. The real case put on behalf of the prosecutor is that Mr Webb not merely belonged to the union but that he took a very active role in its affairs, that he was a person who had been in the forefront of protests by the union against what he had seen as unfair, discriminatory and ill-informed actions by management against journalists employed by companies in the News group, and in particular by the defendant, and of efforts by the union to establish better communications with the management of those companies so as to avoid a repetition of such actions in the future. He contends that he fell into disfavour with the management of the News group because of these activities and that, as a result, the opportunity was taken -- in the context of the retrenchment of about one quarter of the journalistic staff of "The Australian" newspaper -~- to get rid of him. The defendant denies that Mr Webb's union activities were either as extensive or as irksome as Mr Webb suggests and it asserts that these activities, in any event, had nothing to do with his retrenchment. According to the defendant, the prosecutor was selected for ret. enchment because of his low productivity, his attitude to his work and his failure to co-operate with those in authority over him. The defendant also argues that, in any case, the activities claimed by the informant do not answer the description of

either para (d) or para (f), that the union could not be said

to be "seeking better industrial conditions" by the making of protests or the conduct of a campaign of the type referred to by the informant (para (d) ) and that the things done by Mr Webb were not done pursuant to the express authority of the

AJA, conferred on him by the rules of the union (para (f) ).

Section 5(4) of the Act, in its application to subs (1), provides that, in proceedings for an offence, if the other relevant matters are proved, the onus lies upon the employer to prove that the employee was not dismissed by reason of the circumstances alleged in the information. The employer is not obliged to show that the existence of the factor was totally disregarded in the decision making process but the evidence must establish, upon the balance of probabilities, that the prohibited factor was not "a substantial and operative factor" in the reasons for dismissal: see per Mason J, with whom Gibbs, Stephen and

Jacobs JJ agreed, in General Motors Holden Pty Limited v

Bowling (1976) 12 A.L.R. 605 at p 616. It is not enough merely to show that there also existed non-prohibited reasons. The prohibited reasons alleged in the information must be

negatived: Cuevas v Freeman Motors Limited (1975) 8 A.L.R.

321 at p 327, Heidt v Chrysler Australia Limited (1976) 26

F.L.R. 257 at p 268. In the case of a corporate employer, as here, the reasons of the individuals exercising the executive power of the corporation are to be taken as being the reasons of the employer: Wood v City of Melbourne (1979) 41 F.L.R. 1 at p 19.

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The oral evidence in this case occupied almost 15 hearing days. Evidence was led as to the history and terms of Mr Webb's employment, as to various claims for fringe benefits made by him, and as to the nature and extent of work done by him; with comparisons to the work done by others. The financial and industrial travails of "The Australian" were examined at length; ancient personal and industrial battles were re-fought.' This material was admitted on the basis that it indicated the circumstances surrounding -- and therefore bore upon the reasons for -- the dismissal by the defendant of Mr Webb. I think that part of the evidence does provide useful background material, which part I will discuss in context in due course. Much does not; and may be ignored, without unfairness to either party. I will refer to some, but not all, of the industrial and personal problems from which, on the evidence, "The Australian" suffered in the years 1981 and 1982. Many of these problems seem to have stemmed directly from poor fact resolution by, and poor communication between, some senior executives and some members of the journalistic staff; a surprising situation, given the fact that those concerned were trained fact gatherers and communicators. There were no doubt numerous factors contributing to that paradox. A major factor would appear to have been the rigidity of the rules or of the convention -- the precise position was never explained -- relating to the

work appropriate to be performed by AJA members and the

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consequent perceived necessity for a journalist to resign his union membership upon appointment as an editorial executive. The reason for the limitations never appeared but it seems that, on at least on one occasion, the AJA actively sought to discard them. It unsuccessfully urged Mr McCausland not to resign his union membership upon his promotion to news editor. As will appear, those limitations were responsible for the prosecutor's declining to accept a permanent appointment as chief of staff; an appointment for which he was well suited and which he may have found personally fulfilling. They appear also to have created, or contributed to, a division between people of like background -- trained journalists -- which created a "them" and "us" mentality amongst people who

had to work together as members of a team if the newspaper was

The submissions of the parties -- both those made orally and, at my invitation, in writing after the conclusion of the public hearing of the case -- were lengthy and detailed. I have read them carefully but I do not intend to deal in these reasons with all of the matters raised. I will restrict my comments to the contentions relating ts the

critical findings of fact and the major issues of law.

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Nationwide News is a member company of the News Limited group. News Limited is a public company whose chairman is Mr Rupert Murdoch. As at 21 September 1982, the date of the dismissal of Mr Webb, the managing director of News Limited was Mr Kenneth Cowley. Mr Cowley was also chairman of Nationwide News. Mr Cowley had served the group since 1964 and had held office as managing director since 1980. Immediately subordinate to Mr Cowley was Mr Brian Hogben, who had heid since 1976 the position of group general manager (editorial) of the News group -~- with particular responsibility for industrial matters -- and who was also a director of News Limited, and Mr Robert Muscat, who had been since 1980 the general manager of Mirror Australian Telegraph Publications, the business name under which News Limited carries out production of "The Daily Mirror", "The Australian" and the Sunday and daily "Telegraph". Mr Muscat's particular responsibility was in relation to production and financial control. Mr Warren Beeby was the editor of "The Australian" from November 1980 until 22 June 1982, wnen he was appointed to be editorial manager. Mr Beeby was replaced by Sir Larry Lamb, who had had extensive editorial experience, predominantly in England, and who had agreed to accept an appointment for about six months to take the newspaper, in his

words, "up market". Mr Colin Chapman was deputy editor from

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July 1981 until 31 August 1982 when he was appointed as editor -- Sir Larry becoming editor-in-chief -- but two days later he resigned from the service of the company. Mr David Armstrong was news editor from October 1981 until he was appointed as assistant editor shortly after 21 September 1982. Mr John McCausland was news editor from November 1981 until 23 September 1982, when he became night editor, and Mr John Hampshire was chief of staff from March 1982 until late in

Mr Webb, the prosecutor, is a person generally conceded, even by the witnesses critical of him, to have considerable talents as a journalist. He has had extensive journalistic experience, dating back to a cadetship with the "Daily Telegraph" which commenced in 1956. After 10 vears~ with that newspaper, during which he achieved at age 23 the grade of Al journalist - the highest grading in the profession

-- Mr Webb spent seven years working, predominantly, in the United Kingdom and then a further three years in the United States, culminating in the editorship of the National Inquirer, a magazine which he told the Court had then enjoyed the highest circulation of any weekly magazine in that country. Mr Webb returned to Australia for personal reasons in 1977. He then worked on freelance assignments and in radio journalism until, in March 1981, he was engaged by Mr Beeby on behalf of "The Australian". According to Mr Webb, the agreed

terms were for a salary equivalent to the award rate for an Al

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ll. journalist with a penalty for night shift -- whether worked or not -- together with meal allowances and telephone subsidy and.

two allowances totalling $80 per week for expenses and entertainment. In substance, Mr Beeby agreed in his evidence with this account of the arrangement. He confirmed the accuracy of a memo sent by him on 25 March 1981 to Mr Muscat which advised that Mr Webb "has joined The Australian as a journalist grade Al plus a $40 tax free travel and entertainment allowance." The memo went on:

left out the penalty payments", in relation to which he could

Mr Webb worked as a senior journalist for the newspaper -- satisfactorily to his superiors -- until August 1981 when he was asked by Mr Beeby to take an appointment to an executive position as chief of staff. It appears from the evidence that the position of chief of staff is an important one in the day to day operation of a newspaper. The chief of staff has the function of assigning reporting tasks to the journalists on the paper. It is his responsibility to ensure

that events likely to give rise to suitable copy are covered,

that interesting leads are followed up, that the time of reporters is efficiently used and that there becomes available each day to the editorial staff an adequate supply of good quality news stories. Mr Webb told Mr Beeby that he did not wish a permanent appointment as chief of staff because this was an "exempt job", that is one falling outside the provisions of the Journalists Award, so that he would be bound by the rules or conventions to which I have referred to leave the AJA. He did, however, agree to assist by taking the position on a temporary basis for about two months during which time, according to Mr Beeby, he did a "fine job". Both Mr Chapman and Mr McCausland also spoke in laudatory terms of Mr Webb's work as chief of staff and no witness said otherwise. During that period Mr Webb took the step of seeking out Mr Cowley on one or two occasions to discuss problems faced by the newspaper, an unusual initiative for

which Mr Cowley at the time expressed his appreciation.

At the end of October 1981 Mr Webb returned to general journalistic duties, writing both news and feature items. Shortly afterwards an industrial dispute occurred which, according to Mr Webb's case, considerably coloured the attitude towards him of senior management, and especially of Mr Cowley and Mr Hogben. The dispute involved the dismissal

from the staff of the "Sunday Telegraph" of a journalist named

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Sue Short. The AJA claimed, and management denied, that Ms Short had been dismissed not for the reasons given to her but in order to allow the editor of that newspaper to appoint to her position a personal friend. Journalists employed by the "Sunday Telegraph" stopped work. They were subsequently joined by other News group journalists, including those on "The Australian". During the course of negotiations an offer was made by management in relation to an alternative position for Ms Short but, according to the journalists, the company reneged on the offer. On 5 November 1981 a meeting of AJA members employed by the News group was held in the company's office car park. That meeting passed two resolutions relating to the dispute. The first resolution was to continue the stoppage until Ms Short was reinstated in her original position on the "Sunday Telegraph" or in a suitable equivalent position in the Women's Section of another News Limited publication. The second resolution, which was moved by Mr Webb, said, in part:

"THAT this meeting endorses the unanimous decision of

management, including Mr.Rupert Murdoch, our belief

that the outrageous dismissal of an AJA member is an

integral factor in the continuing saga of dismal relations at News Ltd.

THAT we ask Mr.Ken Cowley to meet with the House Committee as a matter of urgency to discuss ways to end the sacking, intimidation and harrassment of AJA members employed by News Ltd. ..."

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The second resolution itself became a matter of industrial dispute. According to Mr Hogben, it may have been the first motion of no confidence by AJA members against editorial executives of a News Limited publication; certainly he knew of none previous. Mr Hogben was "incensed". He declined to negotiate the original dispute whilst the second resolution was in existence. There were negotiations relating to the form of a substitute resolution, apparently between Mr Hogben on the one hand and Mr Brendon Giffney -- a News Limited journalist who was then a vice president of the New South Wales branch of the AJA -- and Mr Jim Nolan, the branch industrial officer, on the other. A form of words, omitting any reference to lack of confidence, was agreed, approved by Mr Cowley and, at a second meeting a few days later, a resolution in these terms was substituted for the earlier one. The original dispute was settled, Ms Short being appointed to a suitable position on the "Daily Mirror": but it left -scars on Mr Cowley. He said in evidence that he felt that he "lost" the dispute and he admitted in evidence that, ten months later during a further industrial dispute, the Van Oudtshoorn matter, he had said that he had had "to eat crow" in the Sue Short dispute and that his colleagues had not agreed with

Mr Cowley said in evidence that he had been aware that, in the Sue Short matter, Mr Webb was involved in keeping informed the journalists on "The Australian". At one of the negotiating

meetings he specifically asked: "Where 1s John Webb?" He agreed

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that, although he had previously indicated to Mr Webb a desire to continue their talks on the problems of the paper, he did not, after the dispute, do so. Mr Armstrong recalled that Mr Cowley "was somewhat cooler" to Mr Webb after this affair. There is little doubt that Mr Webb's involvement in the Sue Short matter

did adversely affect the attitude to him of Mr Cowley.

Mr Hogben denied knowledge of Mr Webb's role in the 'no confidence' motion. He was critical of Mr Webb's involvement in the dispute generally, describing it in evidence as "running around as usual like a busy body". However, he said that his anger in relation to the dispute was directed against others than Mr Webb. But, if this was so, the situation soon changed. Mr Hogben found himself in conflict with Mr Webb over industrial matters during the first half of 1982. Mr Webb was a member of union delegations on various matters early in the year; usually, according to Mr Hogben's colourful but denigrating phrase, in a "spear carrier" role. On other occasions, perhaps about the middle of the year, Mr Hogben was involved in more direct encounters with Mr Webb. There appear to have been two separate incidents in which Mr Webb and Mr Giffney saw Mr Hogben to complain about journalistic work being done by persons who were not members of the AJA. Various allegations were made. Their correctness does not matter; but some of them caused Mr Hogben,

on his own evidence, to become angry, to raise his voice, to

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swear at Mr Webb and Mr Giffney and to tell Mr Webb that he was "a bloody hypocrite". Mr Webb responded by telling Mr Hogben words to the effect that he was not moved by his (Mr Hogben's) petulance. Thereafter, Mr Hogben asked Mr Giffney not to bring Mr Webb to interviews on branch, as distinct from house, matters; Mr Webb not then holding any branch office, other than having

been since 23 March 1982 a member of the branch committee. There

ensued correspondence between Mr Gavin Cantlon, the branch secretary, and Mr Hogben in which Mr Cantlon referred to previous practice and, on 8 July 1982, suggested a meeting of four AJA officers with Mr Hogben and Mr Cowley to discuss "the role of the House Committee, rights of contributors and the work to be done by exempt non-AJA members". Mr Hogben replied that he had passed on the request to Mr Cowley for consideration but nothing further eventuated until, on 28 July, Mr Cantlon wrote again, stressing the urgency of a meeting on these and some additional, specified, matters. But, as Mr Hogben agreed in evidence, such was the strength of his feeling about Mr Webb's role at the meeting with

him and Mr Giffney that the meeting proposed by Mr Cantlon never

By a notice dated 27 May 1982 Mr Cantlon announced that Mr Webb was one of seven persons elected unopposed to the News

Limited House Committee. At the first meeting of that committee,

held shortly afterwards, Mr Giffney was elected as Chairman of

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provided for hy r.36A of the Constitution and Rules of the AJA

The financial and paid-up members within any office may elect a House Committee in consultation with the Branch Committee.

The House Committee shall advise and assist the Branch Committee on any Matters concerning the industrial and professional interests, welfare and conditions of employment of members.

The House Committee shall advise and assist the Branch Committee in representing all members in the office or organisation in which it operates on all matters affecting the industrial and professional interests, welfare and conditions of employment of members.

Each House Committee shall elect a President who shall be the convenor of the Committee and who shall exercise the powers of the Committee between meetings. The President shall report regularly to the Branch Secretary and shall immediately inform the Branch Secretary of any industrial dispute arising within the office. In the President's absence, an acting President shall be appointed hy the House Committee or Branch Committee.

Each House Committee may have issued for their observance by-laws by the Branch Committee which conform to the Rules of the Association, and shall operate within the policy of the Association.

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(h) Where no House Committee exists in any office, a Branch may arrange for members employed in the House to elect an association delegate or delegates who shall have the same duties as a

By a letter dated 15 July 1982 the Australian Electoral office, which was conducting elections for positions in the New South Wales branch of the AJA pursuant to s.170 of the > Conciliation and Arbitration Act, notified the branch secretary that certain candidates had been elected unopposed. One of those persons was Mr Webb, a candidate for one of the two positions of branch vice-president. It appears that, thereafter, Mr Webb was treated by his colleagues and by the News Limited management as having this office although the strict view would appear to be that -- if validly elected -- he took up his office only at the following Annual General Meeting, which happened to be held on the evening before his dismissal, 20 September 1982, when the results of the elections were formally declared. However, the defendant contends that, even after that meeting and therefore at the time of dismissal. Mr Webb was not a branch vice-president, and that his purported election was invalid because he was

ineligible for election. By r.43(a) a financial member was

(1) On June 30 of the preceding financial year owed no dues to the Association ...

(2) has been admitted or re-admitted to membership of the Association and has paid all his dues in accordance with Rule 39{(b)."

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rights and privileges and benefits of membership of the Association but shall not be eligible for

(ii) as President, Vice-President, or Treasurer of a Branch unless' he has been a financial member of the Association for the preceding three

The effect of r.43(b)(ii) was that, in order to be eligible for election as a vice-president for the year 1982-1983, Mr Webb needed to have been a financial member of the AJA as at 30 June in each of the years 1980, 1981 and 1982. There were admitted into evidence membership cards covering the years 1980-81, 1981-82 and 1982-83. The first of these cards was signed by the secretary of the South Australian branch of the association. It certified that Mr Webb was a financial member of the AJA for the year 1980-81 and that he cowed no dues to the association at June 30, 1980. The latter two cards were signed by Mr Cantlon, as secretary of the New South Wales branch, and certified in similar terms in respect of the two later financial years and that no dues were owed at June 30, 1981 and June 30, 1982. These documents,

if standing alone, would indicate the required eligibility.

However, there was also admitted into evidence the transfer of membership certificate dated 26 February 1981 whereby Mr Webb's membership was transferred from the South Australian branch of the AJA to the New South Wales branch. This document showed outstanding dues of $48.70 made up of 1979-1980 dues of $23.60 and 1980-81 dues of $25.10. The

certificate stated that Mr Webb "was a(n) unfinancial member at June 30 last."

I think that the explanation of the conflict between the two documents issued by the South Australian branch secretary is to be found in r.43A of the AJA Constitution dealing with 'paid up' members. That rule relevantly provided:

(a) A paid up member of the Association is a member who has paid all arrears to the Association, including his/her subscription for the current

financial year ending June 30th next. (b) A paid up member is entitled to all privileges,

benefits and responsibilities of financial membership as specified in Rule 43. ..."

Rule 47 requires that a member seeking a transfer of membership to another branch shall apply for a clearance and pay all dues owing to the branch he is leaving. If Mr Webb had done this in February 1981, and paid the dues owing for both 1979-1980 and 1980-81, he would have become a "paid up" member pursuant to vr.43A(a). He would be "paid up" in respect of both 1979-80 and

1980-81. Paragraph (b) of r.43A provides that a "paid up member"

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is entitled to all privileges, benefits and responsibilities of financial membership "as specified in Rule 43". The defendant points out that sub-paras (i), (ii), (ii1) and (iv) are framed in terms of a qualification upon the statement in r.43(b) that "a financial member is entitled to all rights privileges and benefits of membership of the Association" and argues that the privileges and benefits referred to in r.43A do not, therefore,

Linguistically, there is force in that submission but the difficulty is that, save for an entitlement to be issued with a membership card, r.43 specifies no "privileges, benefits and responsibilities of financial membership". Although the drafting is inelegant, I incline to the view that the reference in r.43A ko the "privileges" and "benefits" specified in r.43 was intended to be read as including the entitlement to stand for office after the relevant number of years' membership, equating "paid up"

membership with "financial" membership for this purpose.

Although there is no direct evidence of payment of dues, the membership cards strongly suggest that Mr Webb paid up his dues at about the time he transferred to the New South Wales branch, thus re-instating himself for the preceding year as well as making himself financial for the current year. If the view I have tentatively expressed is correct, his payment of fees during 1981-82, as to which no question has been raised, would then have

completed his eligibility for election. As will appear, having

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regard to my findings on other matters, it makes no difference whether or not Mr Webb's election as branch vice-president was or was not valid. I need not, therefore, express a concludsion upon this matter but I would not be prepared to say that the returning officer acted incorrectly in receiving his nomination for the

I have already referred to the terms of Mr Webb's employment with the defendant. Shortly after his appointment as editor Sir Larry Lamb became aware of the existence of a special

arrangement with Mr Webb. He investigated the position and

formed the view that the "oddities" in the way Mr Webb was remunerated should be removed. Sir Larry Lamb took particular exception to the "further $40 entertainment allowance" referred to in Mr Beeby's letter to Mr Muscat of 25 March 1981 and which, as Mr Beeby had apparently intended, was being paid to Mr Webb as of right and without the necessity for Mr Webb to produce vouchers of expenses. Sir Larry Lamb also disliked the arrangement that Mr Webb would be paid a 2 pm - 11 pm shift penalty allowance, whether or not he worked that shift. He decided to regularize the position and, with Mr Webb's concurrence, he caused Mr Beeby, as editorial manager, on 12 July 1982 to abolish the "entertainment allowance" and substitute an addition of $40 to the first $40 allowance -- the "tax free

travel and entertainment allowance" -- and, on 10 August 1982, to

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substitute for the guaranteed penalty payment the addition of 376 per week to Mr Webb's salary. The final result was, no doubt, more tidy but it is surprising that the investigation -- which involved not only Sir Larry and Mr Beeby but also, at least, Mr Hogben and Mr Chapman -- and "regularization" of Mr Webb's salary arrangements should have occupied significant senior executive time over a period of one month. tt was also, I think, unfortunate in terms of Mr Hogben's attitude to Mr Webb. Although Sir Larry accepted that the arrangements were as claimed by Mr Webb, and as had been paid since the commencement of his employment, Mr Hogben added to his opinion that Mr Webb was a

hypocrite the view that he was also "a chiseller and a poacher".

According to the evidence of Mr Cowley and Mr Muscat, the period during which the matter of Mr Webb's allowances was under attention coincided with one of financial crisis for the newspaper. To the best of Mr Muscat's knowledge -- and he has worked for the group since 1968 -- "The Australian" had never been profitable. During the period since he had become general manager of Mirror Australian Telegraph Fublications he had exercised rigorous economies in the running of the newspaper, including the introduction of a new printing system which enabled a reduction in production staff of about 40 people, but by mid 1982 he was aware of serious financial difficulties. Compared

with the same period in the previous calendar year, and stated in

24, money terms, advertising revenue was down by 3.3%, editorial wages were up by 13.1% and,production costs were up by 3%. The loss was running at a figure almost 50% higher than for the previous year. Moreover, in July and August the position worsened. According to Mr Cowley, the loss for the first five weeks of the financial year 1982-83 was running at an annual rate of about $7,000,000, about double the budgeted loss for the year. A report was prepared for a meeting of the Board of Directors of News Limited held on 25 August 1982. It 'showed that trading results for the first two weeks of the financial year were $1,062,000 compared to $2,100,000 for the same period last year; a loss for that period of s1,400,000. The board discussed the matter but no decisions were made. Mr Cowley explained in his evidence that "at that stage there was still the planning that we talked about, about the re-structuring of the paper". He referred also to a ""re-styled paper which Sir Larry was planning and already had started to put into effect. And it required better writing, better journalism, but a smaller paper and a smaller staff". It is not clear what changes Mr Cowley had in mind, or understood Sir Larry Lamb to have in mind, at 25 August; he said that he was never told more than the "broad outlines" by Sir Larry. Sir Larry said in his evidence that the only changes he ever contemplated were to take the paper up market, that 1s to reduce type sizes and use of pictures and "to introduce more serious and literary work into the newsaper", and "to streamline the editorial staff to a limited extent to make more use of the

wire services." (CIn fact "The Australian" did not increase its

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use of wire services until 1984.] However, I accept that, at 25 August, Mr Cowley was hoping that changes in editorial policy would improve the financial situation and that this was one reason why no decision was made to implement either of the major options which had been canvassed from time to time -- closure of the newspaper altogether or conversion to a weekly paper by

cessation of week-day publication -- or other remedial action.

Mr Cowley said in evidence that he had held the view since the beginning of 1982 that "The Australian" was wv oes over-staffed by journalists but he took no action to achieve a reduction in staff members, even by a process of natural wastage. In fact, over the period 30 June 1982 to 21 September 1982, the number of journalistic staff increased from 145 to 158.

According to his evidence, Mr Cowley was told by Sir Larry -- in July, after he had assessed the situation -- that "we could do with less people." Mr Cowley said that he was orally informed by Sir Larry that the journalistic staff should be reduced by 30 to 40: to about 120 people. He claimed that Mr Chapman was a party to this discussion and that by the beginning of September, when Mr Chapman commenced his two day period as editor, "planning was

well in hand for a major reduction" in the staff and that Sir Larry would have been aware of that. But, according to Sir Larry, he had never discussed with Mr Cowley any proposal for reduction of staff or specific numbers of staff to be retained and, before Mr Chapman left, "there had been no question of

numbers and nothing immediate was planned". Mr Chapman said

that, up to the time hé left, he knew nothing of a decision to reduce by 40. The matter had never been discussed with Mr Armstrong, who became the chief subordinate of Sir Larry when Mr Chapman left. Even more puzzlingly, Mr Cowley conceded in his evidence that, if Mr Chapman had told Mr Webb during his two day reign that there would be additional staff employed, "that would be consistent" with what had passed between himself and Mr Chapman. Sir Larry spoke to similar effect, according to Mr Armstrong, when he reported to him a rumour shortly after the resignation of Mr Chapman. Mr Webb came to him to seek comment upon a rumour that Mr Chapman had been dismissed because he would not agree to dismiss 30 journalists. Mr Armstrong said that was "bullshit", and that the paper was not getting rid of people but actively recruiting. According to Mr Armstrong, he reported the

rumour to Sir Larry, who responded to him in much the same terms

I have no doubt that Mr Cowley and other executives of News Limited were, during the period July -- early September 1982, concerned about the worsening financial position of "The Australian". It is likely that, from time to time, there was discussion in general terms relating tc a reduction in the number of journalists employed by the newspaper but I am satisfied that, until the commencement of the Van Oudtshoorn incident, neither Mr Cowley nor any other executive of the newspaper gave serious consideration to a substantial reduction in the journalistic workforce of "The Australian"; whether by retrenchments or

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On about 19 August 1982 Sir Larry Lamb decided to publish in "The Australian" an apology to readers. In evidence he explained his reason in this way:

"IT think we had lost an edition, the night's issue because of the industrial problems of the time and we had also been late and not got to all our customers and on several occasions there was a difficult situation. After we had lost a newspaper, I proposed to put an apology on page one explaining to the readers that we had

The industrial problems to which Sir Larry referred were stoppages affecting "The Australian" in common with other metropolitan dailies and which were related to award negotiations then in progress. The apology drafted by Sir Larry read:

Exception was taken to the wording of this apology by some of the sub-editors, who were AJA members. They refused to handle the copy. Sir Larry apparently reconsidered the matter and, on 20 August, there was published an apology in less contentious terms:

members of the Australian Journalists Association."

The Van Oudtshoorn dispute had its origin on Sunday 12 September 1982. Sir Larry Lamb overheard Mr Nick Van Oudtshoorn, one of the sub-editors of "The Australian", making a telephone call. It became obvious to him, he said in evidence, that Mr Van Oudtshoorn was reading a story froma copy of that day's "Sunday Telegraph". He deduced that the recipient of this material was the Manchester "Daily Star", a newspaper in competition with the London "Sun" -- a News group newspaper which Sir Larry had formerly edited. In Sir Larry's words: "I called him" (Mr Van Oudtshoorn) "into my office and admonished him and told him that this kind of behaviour would not be tolerated and that I would be confirming this warning in writing". He did so, the next day. His memo read:

time, to sell the company's material to a U.K. newspaper with which our U.K. colleages are in direct competition, as thoroughly reprehensible, disloyal and dishonest.

summary dismissal on the ground of outrageous misbehaviour."

Sir Larry said in evidence that he had no recollection of speaking to Mr Cowley about the memo but Mr Cowley remembered having seen and approved the memo before it was sent. He agreed

with the decision to send the memo even though, on his own

admissions, he thought the language "strong", the memo "a little unusual for Australian journalists", he had no information as to Mr Van Oudtshoorn's side of the matter and he "sensed" that it might give rise to an industrial dispute. Sir Larry evidently shared that opinion because he sent a copy of the memo to Mr Hogben. They were right. The memo did give rise to an industrial dispute, but not immediately. Upon receipt of the memo Mr Van Oudtshoorn sent a reply, with a copy to Mr Hogben. Omitting formal parts, it read:

"T refer to your letter of today which has just been delivered to me by hand.

Your letter contains a substantial number of grossly inaccurate and grossly insulting statements. It is obvious that you paid no attention at all to the explanations I gave you during our conversation yesterday after you eavesdropped on a private conversation. As a result, I am now on the advice of the Australian Journalists Association putting in writing the facts as to the events of yesterday afternoon.

1. I had permission from the acting chief sub editor, Mr Mike Toshack, to take 15 minutes of my meal break to make a telephone call. I have for the past 3 1/2 years been stringing for a group of South African newspapers and for about the same time for the Daily Star in Manchester. I was never informed that there was any objection to my stringing for any foreign newspapers and I have done so openly in the past. I have cable credit cards to file copy to both, which means that I have to make only a local call to OTC in Sydney.

2. Because there was some noise at my desk in the sub-editor's section, I mede a telephone call from the office of the Weekend Australian, in which area your office is located. I in no way tried to use the telephone secretly or to file copy in a secretive manner - if that had been my intention I would certainly not have used a telephone in the same general area as your office.

3. The story I was filing had already appeared in the Sunday Telegraph on Sunday morning. It was based on a paper delivered to a medical congress and I obtained permission from the source to use the quotes and material. There is thus no substance in your

allegation that I was using "company material", nor that I was using "company time".

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4, When you called me into your office after you had listened to the entire conversation without in any way making your presence known, I informed you of the facts

• or as many as you would give me a chance to - and offered to pay for the telephone call, which you declined to accept.

I have discussed the matter with representatives of the AJA and am writing this letter on their advice. [I hereby demand an immediate and full withdrawal of all the allegations contained in your letter, and an

apology for the slur which you have cast upon my journalistic integrity and upon my character."

There was no response. On Tuesday 14 September Mr Cantlon and Mr Giffney visited Mr Hogben to demand a withdrawal and apology from Sir Larry. He refused. Later that day he hada further meeting with Mr Cantlon, Mr Giffney and, this time, Mr Webb at which he maintained his refusal. Late that afternoon the

On Thursday 16 September Mr Cantlon wrote to Mr Cowley about the matter. He expressed disappointment that Mr Cowley was "not able yesterday to meet the request of AJA members for an early conference to help solve the current situation of the Australian even though our members are still in dispute." Mr Cantlon went on to set out the AJA position:

"There appears to be no argument about the sequence of events on Sunday, September 12. What is at issue are two points: (1) The company's claim that there is a policy known to all covering the operation of "stringers"; (2) The excessive and inflammatory style of the memo sent to Mr. ... van Oudtshoorn.

We have presented the company with information of conversations at the time of Mr. van Oudtshoorn's appointment which we consider are vital to the first point. Briefly it is this --

When Mr. van Oudtshoorn was interviewed for his position it was done by a senior staff member, who was also an A.J.A. member, on the instructions of the Editor. During that interview Mr. van Oudtshoorn raised the question that he was a correspondent for some overseas newspapers and sought advice whether this would be a problem with his employment. No objections were raised at that time and the person who interviewed him also claims to have mentioned it in passing in discussions with the Editor, Mr. Beeby, about the appointment.

Since that interview last November, Mr. van Oudtshoorn has acted openly and with the knowledge, not only of his fellow workers but of persons exempted from the award, working on the back bench of the Australian. We believe it is also significant that some of these people, who are company executives, have no knowledge of any company policy on 'stringing'.

As I have pointed out to the Group General Manager (Editorial), Mr. Hogben, if the company has such a policy then it should be made known to staff so that our members and your employees are not unwittingly offending such a policy. I should also point out that it is a published fact that at least one senior staff member was a correspondent for an overseas paper that must be considered to be in opposition to a Murdoch publication.

Now to the second point. If the Editor-in-Chief believed that Mr. van Oudtshoorn's actions were detrimental to other company publications then it would have been within his rights for him to write a formal considered memo to that effect. To deliver a memo which is inaccurate and which contains highly damaging words, we believe, is totally wrong. As I have informed Mr. Hogben, we believe the original memo should be withdrawn and replaced with one more in line with company practice in its dealings with staff.

I would also like to draw your attention, and hope to have a chance to fully discuss with you, what I see to be a serious morale problem at the Australian. I am sure I do

not have to remind you of the resolutions carried in settlement of the Sue Short dispute in 1981 which sought to establish proper management/staff relations and to draw attention to management of any future likely causes of disharmony.

What has become clear to me in the past few days is that there is a serious staff/management relation problem at the Australian and I believe it is a matter of urgency for hoth the company and the union to consider this as soon as possible and avoid any future incidents of the kind we are currently facing. A.J.A. members employed on the Australian are intensely loyal to that paper and are vitally interested that it continues to publish uninterrupted to the highest possible standard; but they are also deeply concerned at the breakdown between staff and management. They want a better relationship -- they want better

communication -- they want to produce the best paper they can."

At some stage -- it 1s not clear whether as a result of Mr Van Oudtshoorn's letter or of Mr Cantlon's letter -- Mr Hogben checked with Mr Dargaville, who conducted Mr Van Oudtshoorn's employment interview, the claim that Mr Van Oudtshoorn had obtained at that interview permission to "string". In evidence

Mr Hogben said: "Dargaville tended to confirm that he had said

everything is okay". He also said that he had been "impressed »- by the statement that Mr Dargaville, although an AJA member, acting on the editor's instructions had okayed this business of stringing; that added a new element to the information then to hand". But nobody acted upon the "new element". Mr Hoghen's explanation in evidence -- one that he claimed to have given to

AJA representatives at the time -- was that 1t was expected

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convention that an employee approach his editor before accepting any stringing. Mr Hogben also told the AJA delegation that Mr Cantlon's letter did not express the sincere feeling of the staff, that the staff would not be happy "until it sees Lamb ridden out on a rail and management forced to abdicate its role" and, later that day, that "Mr Murdoch said quite clearly that he

There were apparently two meetings of journalists employed by "The Australian" on Thursday 16 September. At the first meeting, held at 2.30 pm, a resolution, in the following terms, and moved by Mr Webb, was adopted:

"This is to confirm our opinion of your lack of appreciation of your responsibilities as Editor or Editor-in-Chief of The Australian.

We regard your conduct, in bullying and adopting tactics of confrontation in your dealings with A.J.A. members as misguided.

Be advised that any repetition will result in our refusal to work with you, pending an assurance that you will cease this outrageous misbehaviour.

Be further advised that, in line with our continuing attempts to improve this company's abyssmal record in industrial relations, we again seek proper negotiations with Management to resolve this matter satisfactorily.

Pending those negotiations - which we assume no reasonable management would refuse - we resolve to discuss this matter at 4.30 pom today upon report from A.J.A. and House Committee representatives.

That this meeting demand a retraction and an apology by the Editor-in-Chief in accordance with this resolution."

There were no negotiations and, at 4.30 pm, the journalists resolved to meet again at 10 am on the following Monday and to stay on strike in the meantime. In the meantime Mr Cantlon attempted to settle the dispute through Mr W. O'Neill, chief industrial officer of News Limited. Mr Cowley agreed in evidence that he had not told the AJA representatives that he had seen Sir Larry's memo before it was sent and that, during the week, he had been urging a return to work upon the basis that Mr Van Oudtshoorn's complaint would then be discussed. However, Mr Cantlon obviously needed more than that. On 17 September he submitted a draft of a suggested substitute for Sir Larry's letter of 13 September; a draft which clearly stated the company policy and warned of the consequences of stringing without prior approval but which was expressed in courteous terms. There was apparently no response but a meeting was arranged between the federal secretary of the AJA, Mr Neal Swancott, Mr Cantlon and Mr Giffney -- and perhaps others; but not Mr Webb -- with Mr Cowley

Mr Cowley had in the meantime decided that there should be retrenchments of journalists. He said that his earlier general intention had "firmed up" during the strike; the strike had worsened the paper's financial position. On the Monday morning, according to Mr Hogben, Mr Cowley told Mr Hogben "that over the weekend and during the course of the previous few days

he determined that there had to be fairly extensive retrenchments

from 'The Australian' whether or not there was a return to work". At the meeting, according to Mr Hogben, Mr Cowley informed the AJA representatives that, unless there was a return to work by 11 am that day, the paper would be closed -- and he delivered a letter confirming this -- but that even if there was a resumption there were going to be substantial retrenchments, that "the paper needed firm management and an absence of the sort of disruption which had been taking place". Mr Cowley said that he spoke also of the paper's financial crisis and that he spoke of "major" retrenchments "at an early date". He did not mention either

The journalists did return to work by ll am. At 2 pm those who had met at 9 am met again, with the addition on this occasion of Mr Webb. There was-discussion about the proposed

retrenchments. Mr Cowley indicated that between 30 and 40 persons would be dismissed "by the end of the week". Mr Webb raised the possibility of the company accepting volunteers for retrenchment. It was agreed that there should be a further

meeting to discuss retrenchments on the following Wednesday.

In the meantime, however, Mr Cowley had set in hand retrenchment action. Before lunch on Monday 20 September Mr

Cowley instructed Mr Hogben that he was to do the administrative

work regarding retrenchments but that -- in the absence of Sir

Larry Lamb who had taken the opportunity of the strike to go fishing at Eucumbene -- Mr Armstrong was to compile a list of approximately 40 journalists for retrenchment. Either through Mr Hogben or directly, Mr Cowley said in evidence, he told Mr Armstrong that the people to be put on the list "would be based on those that could be done without under the new format of the paper". Mr Armstrong gave a different version. According to him, Mr Cowley said those to be listed were "people who were unproductive, who were lazy or incompetent or who were disruptive". This version corresponds closely to the words of Mr Cowley to Mr Hogben, as recited in evidence by Mr Hogben: "We have got to get rid of the ones who are no good or lazy and we ought to get rid of the people who are trying to disrupt the paper". I think it probable that Mr Cowley's instruction to Mr Armstrong made specific reference to people who were disruptive. Mr Hogben added some advice to Mr Armstrong: to work out who they should keep, "to weed out from the bottom of the list", "to start with the least valuable and continue up". Mr Armstrong started work on the list, assisted by Mr Beeby. By lunchtime, according to Mr Armstrong, they had selected six or seven names,

mainly from the more highly paid journalists and including that

of Mr Webb. Mr Beeby thought that he might have assisted in -selecting 12 names; he could not recall whether Mr Webb's was amongst them. At about lunchtime his involvement was terminated by Mr Cowley who told him to keep out of it, "that he wanted all the judgments made about who would be retrenched to be editorial

judgments, to be made by editorial executives". So Mr Armstrong

was left to do the task alone. But he was not left without advice. Despite his comments to Mr Beeby about the desirability of only editorial judgments, made by editorial executives, Mr Cowley permitted himself to become involved in the selection process to some extent. At some stage during the Monday, whilst Mr Armstrong was working on the list, Mr Cowley suggested to him that he might wish to reconsider his inclusion on the list of the name of a journalist called Johnson, from the Melbourne bureau. Mr Armstrong explained his reason for including Johnson and his name was retained on the list; Mr Johnson being ultimately retrenched. Mr Cowley also suggested the names of two journalists from the Brisbane office that Mr Armstrong "may wish to keep in mind": Mr J Begley and Mr H Davis. Mr Armstrong questioned both suggestions but he acceded to them. He placed both names upon the list. Mr McCausland subsequently argued against the inclusion on the list of Mr Davis but both Mr Begley and Mr Davis were retrenched. According to Mr Armstrong, Mr Cowley described Mr Begley as a "stirrer". Mr Armstrong

understood him to be active in the AJA, but he said in evidence

that he thought him to be also "a good and reliable journalist"

Mr. Hogben also offered comment on some names on the Monday. Mr Hogben gave evidence that, after the return to work at ll am, Mr Cowley told him that "the retrenchments had better take place sooner than later". Mr Hogben had a meeting with some

of the personnel officers of the company to arrange the necessary

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administrative steps and then "a fairly informal meeting" with Mr Muscat, Mr Beeby and Mr Amstrong at which he announced that he would write the letters of dismissal, which letters should be delivered by management. In evidence he went on:

there was a discussion of some possible candidates."

According to Mr Hogben, Mr Armstrong then mentioned a few names. They included those of Mr Philip Cornford and of Mr Webb; to the latter of which Mr Hogben commented "Bloody good job". Although Mr Hogben denied that he intended his comments to affect Mr Armstrong, he conceded that he thought that they "might have had some affect". Mr Armstrong acknowledged that Mr Hogben had asked whether Mr Webb and Mr Cornford were on the list -- on the Monday although presumably later than at the time recalled by Mr Hogben -- but he did not agree that Mr Hogben had made it clear that he expected these two men to be included on the list. Whether or not Mr Hogben's reference to Mr Webb and Mr Cornford was intended as an instruction, and I doubt that it was, I think it much more likely that -- as Mr Armstrong said -- 1t was Mr Hogben who brought up these names. It seems to me highly unlikely that Mr Armstrong would, immediately upon being given the task of preparing a comprehensive list, mention these two names, especially when

Mr Webb was not his first or second choice for retrenchment.

It is extremely likely that Mr Hogben, who was very critical

of both men, would wish to implant the seed of their names in

At about lunchtime on the Monday Mr Armstrong telephoned Sir Larry. Sir Larry's reported reaction 1s interesting; it throws light on the question as to when the

retrenchments had been planned. According to Mr Armstrong,

Sir Larry exclaimed "Bloody Ken" and said that he had not been told about the retrenchments. He told Mr Armstrong to process the list as instructed. Mr Armstrong did so. He worked through the night until early the following morning, eventually compiling a list of about 40 names. Mr. Webb's name was on the list. In his evidence, Mr Armstrong gave his reasons for including Mr Webb amongst those to he retrenched:

contribute, and that his range of interests, if you like, were very narrow. He reported a lot

more diverse in their reporting." Mr Armstrong added that Mr Webb's "behaviour in relation to Mr Hampshire, his attitude to roster and matters of that kind" had plaved a part in his thinking "but only a minor part, I think, because by this stage some of those problems had been resolved". Mr Armstrong said that, in his mind, Mr Webb would

have been about sixth or seventh, of the 40, in the order of

those who should go. He denied that he was in any way

influenced in favour of retrenching Mr Webb because of his union position or of any union activities in which he indulged, adding: "If anything it was a little to the contrary. I was quite worried on that score". Under cross~examination Mr Armstrong agreed that he had been worried about the loss of production of "The Australian" during the Van Oudtshoorn dispute and that he had strongly disapproved of the AJA stance. He agreed that he was aware of a view amongst some of the executives on the newspaper that Mr Webb was an "industrial disruptive" but he said that he "tried to make sure" that these factors did not influence his judgment as to whether or not Mr Webb should be listed for retrenchment. In re-examination he said that, at the time, he did not have much knowledge of Mr Webb's role in the Van Oudtshoorn matter. He was asked which names he placed on the list pursuant to Mr- Cowley's instruction that he should include people who were "disruptive". He said that Mr K Slater fell within that category, although he was not industrially disruptive. He said that Mr Webb fitted the category of "industrially disruptive", but that this was not the reason for his

At some stage, Mr Armstrong thought the next morning, Mr Armstrong showed the list to Mr McCausland. He wanted "a second opinion". According to Mr Armstrong, Mr McCausland suggested a couple of changes, which he made. Mr Armstrong

recalled no suggestion regarding Mr Webb. In evidence Mr

McCausland said that he did not recall making any comment about the presence of Mr Webb's name on the list "but [I certainly offered no objection to him being on the list". He added that "Mr Webb would have been first on my list if I had been asked to prepare it".

Sometime on the Monday afternoon Mr Cowley telephoned Sir Larry Lamb. He told Sir Larry that it was proposed to make "dramatic reductions in the staff". He asked him to cut short his fishing break and come back to Sydney to consider a list of names. Sir Larry did so. During the morning of Tuesday 21 September Mr Armstrong took to him the list. They discussed it. Sir Larry said that the discussions continued for about six hours; Mr Armstrong said that they were completed within an hour. I prefer Mr Armstrong's evidence on that point; there would not have been six hours available and, anyway, Sir Larry made very few changes. Mr Armstrong said in evidence that he recalled no comment by Sir Larry regarding Mr Webb. Sir Larry said that "we went through each name laboriously". There was no dispute between them regarding the selection of Mr Webb. Asked for his reaction to seeing Mr Webb's name on the list, Sir Larry said in evidence: "IT would have thought he would have been high on anyone's list of potential redundancies. I would have been surprised not to find him there". Asked for his reasons, he said: "Because I did not regard him as a very good colleague. He was indolent

and unresponsive to discipline and I thought set a very bad

example to younger members of the staff". Sir Larry described

Mr Webb's productivity as "very low". Asked about his awareness of Mr Webb's "conduct or performance as a union activist", Sir Larry replied: "I was never particularly conscious of him as a union activist. I was aware that he held office of some kind but he was not a union activist in the sense of the word that union activists were an

Sir Larry did make some changes to the list, adding the names of Mr Merv Barber and Mr Michael Toshack. These two gentlemen were each described in evidence by Mr Armstrong as coming -- along with Mr Webb -- into the category of being "industrially disruptive". Mr. Toshack had recently been appointed by Mr Armstrong as deputy chief sub-editor; although Mr Armstrong said that he found him slow in checking work. In evidence Mr McCausland expressed a "high regard" for Mr Toshack's work. Mr Hogben described him as a "very skilful journalist" but "a fighting pieman, who wanted to make a fight of every minute of the day". Mr Barber had recently filled the position of acting news editor for about six weeks, apparently satisfactorily. The evidence does not reveal the extent of Sir Larry's knowledge of the work of Mr Toshack and Mr Barber. Asked about consultations between Mr Barber, as acting news editor, and Sir Larry, Mr McCausland replied: "TI do not think that Mr Barber had too many. if any, close

consultations with Sir Larry. I do not think anybody had".

But the evidence does reveal that Sir Larry believed Mr Toshack to have initiated the refusal of the sub-editors to handle Sir Larry's apology to readers, referred to above. At that time, according to Mr Armstrong, Mr Barber had spoken in opposition to the apology being printed. "In his evidence Mr Armstrong said that he protested to Sir Larry about the selection of Mr Toshack and Mr Barber, telling him that they were good journalists but Sir Larry insisted. His only explanation, according to Mr Armstrong, was: "I am not having them. Put them on". The list, thus finally settled by Sir Larry and Mr Armstrong, contained 39 names. It became the list of those ultimately retrenched. It was taken to the personnel officers who prepared the retrenchment notices. During the afternoon of Tuesday 21 September Mr Hogben was called from a meeting he was attending, the purpose of which was to discuss the new journalists' award. He spoke to Mr Cowley on the telephone. Mr Cowley told him that he had decided that the dismissals would go ahead and asked him to inform the relevant AJA State secretaries, who were all present at the meeting. He did so. They requested him to seek a deferment of the dismissals until the meeting which had been arranged for the following, Wednesday, morning. He telephoned Mr Cowley to pass on this request. Mr Cowley refused. ~ The dismissals proceeded that afternoon. The selected persons, including Mr Webb, were each called aside

and handed a letter of dismissal together with the salary due

Mr Rupert Murdoch was not in Australia when the retrenchments occurred. He did, however, visit Australia during the following November. The transcripts of two radio interviews that he gave during that visit have been put into evidence. The first interview was conducted by Mr Derryn Hinch of Radio 3AW Melbourne on 16 November 1982- The two men discussed a number of topics; one being the current position of "The Australian". That discussion included the following exchange:

MURDOCH: No. HINCH: Or go to being a weekly? MURDOCH: No, no chance at all. We've

never thought about it. We're very happy with it and we've had difficulties and - with it

• in the last year, we've had industrial trouble which I now think 1s behind us. We cleared out the people who were causing us that trouble and in a very painful effort which cost us - you know - several days publication and interrupted the habit but we're building back from that and we've been here through good times and through bad times and we're going to be here forever,"

Three days later Mr Murdoch recorded an interview with Ms Margaret Throsby of the ABC, which interview was played on "City Extra" on 23 November 1982. During that interview the conversation turned to the economics of publishing newspapers.

"THROSBY It must be expensive, for

• instance, to put a reporter or team of reporters onto a story which might take them away for weeks or months on end as they investigate it. Is that an expensive exercise?

MURDOCH Yes, it always has been and I don't think anyone has ever flinched from that. The area where people have been trying to cut costs has been in the mechanical areas, we've gone over to new forms of printing and typesetting in our case we have dispensed with the services of hundreds of compositors and printers over the last few years in the production of our newspapers and Fairfax' are now doing the same thing. Unfortunately it has led to a rather worse standard of printing - I hope that's only temporary.

THROSBY It has also led to the sacking of journalists on the Australian has it not?

MURDOCH No that was a rather separate issue. We were, we certainly needed to make some economies at the Australian which was feeling the pinch of the recession. But we also had a number of people there who were not happy there, not happy with the paper and we thought it was best to clean house."

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Mr Murdoch's comments were picked up in a publication "Media

Monitor" which is received by some, at least, of the

executives of News Limited. The extracts I have quoted were noted in a circular published by the New South Wales Branch of the AJA on 8 December 1982 and widely distributed, including

on the News Limited notice board. This notice read, in part:

"ALL METROPOLITAN DAILY AWARD MEMBERS FOR THE RECORD

In his statement -in The Australian on September 24 following the mass sackings of 39 journalists, the Managing Director of News Limited, Mr. K. E. Cowley, said:

".... stringent cost cutting measures, including the retrenchment of editorial staff, give The Australian vastly improved prospects of weathering the current recession...."

He urged management and staff to "resume their team efforts with a will". At all times in negotiations with the AJA the company insisted that economic reasons were the sole reason for the retrenchments."

The document then set out the extracts from the two interviews

"The Branch Committee has decided that these important admissions be circulated to members so that they may be aware of the duplicity with which the sackings were handled.

The Branch 1s seeking further urgent legal advice on the implications of these statements. Also, Deputy President Keogh is being informed of them.

At its meeting on November 23, 1982, the Branch Committee deplored the statement by Rupert Murdoch on A.B.C. radio on November 23 that the

sackings of 39 A.J.A. members stemmed from a management decision that "it was best to clean house".

It noted that this statement repudiates the phony stand taken by Mr. Murdoch's management, before and after the sackings. The Committee re-affirmed its condemnation of that brutal action and pressed its disgust that members were thrown out of work on the spurious ground of 'economic necessity', despite an agreement by management to discuss its proposal for voluntary redundancies. The Committee assured members that a mass stop work meeting to consider the

continuing assaults upon A.J.A. members would be held soon."

At no stage were the statements made by Mr Murdoch as

to the circumstances surrounding the September retrenchments corrected by him or repudiated by any other News Limited executive. Although Mr Murdoch visited Australia during the course of the hearing, he was not called to give evidence.

The prosecutor relied upon these statements as admissions, from the most senior executive of the defendant company, that the dismissals were inspired by motives other than the economic necessity claimed by Mr Cowley and in particular, in the words of the Hinch interview, to "clear out" the people who had caused the industrial trouble which had affected the newspaper over the previous year or, in the words of the Throsby interview, to "clean house" in relation to "a number of people who were not happy there". In addition, they point to Mr Murdoch's statement to Mr Hinch that "we've never thought about" the newspaper becoming a weekly and his careful distinction to Ms Throsby between cost problems and the recent

sacking of the journalists: "that was a rather separate

The evidence of Mr Cowley indicates that he was in telephonic contact with Mr Murdoch during the course of the Van Qudtshoorn dispute. The welfare of "The Australian" was something close to Mr Murdoch's heart. When asked by Ms Throsby which newspaper was "most precious" to him, Mr Murdoch responded: "Oh I don't know. I think the one that I have probably invested the most sweat and blood and money into it has been 'The Australian'". I have no doubt that. before taking a decision to dismiss about one quarter of the journalistic staff of "The Australian", Mr Cowley consulted Mr Murdoch and that the two men discussed the reasons for the proposed dismissals. As I have indicated, I accept that Mr Cowley was concerned about the deteriorating financial position of the newspaper. Mr Murdoch was, no doubt, aware of that position and it would be surprising 1f the two men had

not at some stage discussed finances and the possibility of

effecting economies by reduction of staff. However, Mr Murdoch thought that more than that was involved in the dismissals; he understood them to involve, at least in part,

a clearing out of the people who had caused industrial

One possible reading of Mr Murdoch's statement to Mr

Hinch is that the company deliberately manipulated the Van

Oudtshoorn dispute so as to provide a means of clearing out

the troublemakers. Mr Murdoch referred to the clearing out being: "... a very painful effort which cost us ... several days publication". The loss of publication which he mentioned must have been the loss in relation to the Van Oudtshoorn dispute; there was no loss of publication following the retrenchments. This reading is, perhaps, supported by the extraordinary manner in which the company chose to conduct the Van Oudtshoorn dispute: Mr Cowley's approval of Sir Larry Lamb's highly provocative -- and it would seem unfair -- memo to Mr Van Oudtshoorn,- the company's refusal to act upon the information that Mr Dargaville had authorized Mr Van Oudtshoorn's stringing arrangment, the company's failure to respond to, or even to show to Sir Larry Lamb, Mr Cantlon's constructive and conciliatory letter of 16 September and Mr Cowley's refusal to meet AJA representatives to discuss the dispute. The conduct of management could hardly have been

more conducive to the creation and maintenance of an

If the view were taken that the Van Oudtshoorn dispute was created amd maintained by the company in order to provide the pretext and the conditions for clearing out "troublemakers", it would not, I suppose, be difficult to take the further step of attributing to the management a willingness to disguise its intention by simultaneously dismissing -- in the name of economic necessity -- a large

number of other people. But, although I remain puzzled by Mr

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Murdoch's choice of words, I am not persuaded that the company so acted. I think that Sir Larry Lamb reacted so strongly to Mr Van Oudtshoorn's telephone conversation because of the circumstance that the newspaper to whom Mr Van Oudtshoorn was supplying information was in active competition with the paper upon which Sir Larry had made his editorial reputation and for which he retained a strong affection. The senior executives of the company probably felt bound to support Sir Larry, especially having regard to his strength of feeling, and Mr Cowley -- perhaps bearing in mind the comments of his colleagues over the Sue Short dispute -- was determined that, whatever the facts that came to hand, he would not back down. Although their conduct of this dispute reflects poorly upon both the judgment and sense of fairness of "senior management, I am not persuaded that the dispute was, from first to last, a stalking-horse to get rid of "troublemakers".

Counsel for the prosecutor rely upon the interpretation of Mr Murdoch's statement which I have just discussed but they suggest that it is not necessary to go so far, that 1t is enough to say that -- the dispute having arisen and the journalists being faced with the necessity to return to work empty-handed -- Mr Cowley seized upon the

opportunity of their weakened and demoralized condition to rid

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troublemakers. Counsel do not assert that all of those dismissed were regarded as troublemakers; indeed only five people -- Messrs Toshack, Barber, Begley, Slater and Webb -- are mentioned in the evidence as falling, upon anybody's view, into the category of any sort of troublemaker. Nor do counsel deny the possibility that, although the industrial position determined the timing of the dismissals, financial considerations may have played a part in the decision to undertake the exercise. They suggest a further possibility, either alternatively or in addition to financial considerations: that Mr Cowley desired to inhibit further industrial unrest by a display of strength. But, whatever the validity of those speculations and the underlying motivation for the dismissals, they contend that decisions were

deliberately taken to place upon the list certain persons

simply because they were union activists. Expressed in terms of onus and in relation to the particular prosecutor, they argue that, upon the evidence, the Court cannot be satisfied that Mr Webb's union activities were not a "substantial and

operative" factor in the decision to include him amongst those

It 1s, I think, probable that Mr Cowley's decision to retrench was dictated by a mixture of considerations. The timing of the dismissals was certainly determined by the industrial position. That position may also have influenced

the extent of the dismissals. Mr Cowley may have thought that

a bloodbath would be likely to encourage good behaviour in those retained. But there was also cause for concern about finances and the dismissal of about one quarter of the newspaper's journalistic staff must have resulted in substantial savings to the company. That there was a genuine desire to cut costs is, I think, substantiated by the fact that the company held its journalistic staff numbers at the reduced level for a considerable time after 21 September 1982. Immediately before the retrenchments the journalistic staff totalled 158 (excluding cadets, 144). At 30 September 1982 the figure was 120 (excluding cadets, of whom none were retrenched, 106); at 30 December 1982, 115 (excluding cadets, 101); at 31 March 1983, 122 (excluding cadets, 108); at 30 June 1983, 125 (excluding cadets, 109); at 30 September 1983, 127 (excluding cadets, 112) and at 31 December 1983, 124 (excluding cadets, 112). Not until 1984 did the figures rise appreciably and even at 15 August 1984, the latest date shown by the evidence, the figure was only 138 (excluding cadets, 124); still 20 below the figure at the date of the retrenchments. Moreover, and without setting out all the figures, the largest reduction was at the top end of the scale -- grade Al, A2 and A journalists -- where the greatest financial savings could be made; and the reduced numbers in these grades were retained almost unaltered from after 21

These matters of motive leave open the question whether, as argued, the opportunity was taken of removing persons who would not otherwise have been selected for retrenchment but who were noted union activists. The evidence, so far as it goes, does suggest that the industrial activities of some of the retrenched employees -- Mr Toshack, Mr Barber and, possibly, Mr Begley -- cost them their jobs. Those names were not selected by Mr Armstrong, the person who undertook the invidious task of weighing the comparative merits of the journalists employed by the newspaper. They were imposed upon him by others, apparently only because of their industrial activities. However, in the case of Mr Webb, Mr Armstrong selected the name. It is true that Mr Webb's name had been mentioned to him at an early stage by Mr Hogben, who occupied a position in the company senior to him, and I bear in mind the comment of Smithers J. in Wood at p.19 -- which was referred to by counsel for the prosecutor -- that where "one of the officers 1s junior to the other, and is seeking the co-operation and advice and possibly the direction of the other, obviously for a sharing of responsibility, it is not probable that the junior will have secret reasons not disclosed or act contrary to the advice or direction of the senior". This is, of course, simply an observation as to the way in which people usually behave. It is not a principle of law. Moreover, 1t is not directly applicable to this case if.

as I have found. Mr Armstrong did not seek the advice or

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direction of Mr Hoagben. Nonetheless I bear in mind that Mr Hogben was an older man, occupying a more senior position in the company. Mr Armstrong has sworn that he was not influenced by that reference and that, in his estimation and given the necessity to find about 40 names to present to Sir Larry Lamb, Mr Webb was a person appropriate to be included on his own merits -- or lack of merits -- and without reference to his record as a union activist or industrial troublemaker. The critical question, as it seems to me, is whether I accept Mr Armstrong's evidence in this regard. If I do accept that evidence then it must follow that the substantial and operative cause of Mr Webb's dismissal was Mr Armstrond's assessment of his journalistic qualities rather than his industrial activities. It would not matter that, had Mr Armstrong not included him on the list on Journalistic merit, some more senior person may have added him to the list for other reasons. I interpolate that I think this to be a real possibility. Mr Cowley had shown himself not reluctant to impose names upon the editorial executives and I suspect that, given the hostility against himself that Mr Webb had generated, management would not have endorsed a list which excluded his name. But my suspicion -- although material to the question whether Mr Armstrong made a genuine judgment based on journalistic merit -- is of no significance if I nonetheless accept that the operative decision was that of Mr

Considerable evidence was led in relation to Mr Webb's journalistic qualities. The emphasis was upon his performance during the year 1982. No witness disputed Mr Webb's innate journalistic talent, the adequacy of his experience or the quality of the work that he had done either before he joined "The Australian" or after that date and until he completed his term as acting chief of staff in October 1981. The complaints made against him fall into two categories: lack of productivity and undesirable attitude to

Before turning to that evidence, I should make two preliminary comments. First, there is not here an issue whether Mr Armstrong was in fact justified in the view that he claims to have taken: that -- having regard to relative journalistic merits and demerits -- Mr Webb was one of the 39 journalists which the newspaper could most easily spare. The defendant was entitled to make its own judgment on that question, the correctness of which is not a matter for this" Court. The only relevance of Mr Webb's journalistic merits or demerits is the light which they shed upon the question whether, as Mr Armstrong claims, the decision was in fact made by reference only to those merits. The prosecutor contends

that his abilities, experience, achievements and output were

such that the Court should reject as unworthy of belief Mr

Armstrong's assertion that he was selected by reference only to journalistic criteria. The defendant contends, upon .the contrary, that -- whatever his innate abilities -- Mr Webb's recent work record readily supports Mr Armstrong's claim that these criteria were used. The question in relation to which the material was tendered can, I suppose, be framed as asking whether it was rationally open to Mr Armstrong, having regard to all relevant matters, to take the view that Mr Webb was amongst the 39 journalists least desirable to be retained. An affirmative answer to that question does not necessarily mean that he was incompetent or idle, but simply that others were more worth retaining. Moreover the words "worth retaining" do not necessarily mean more skilful or even more industrious. Mr. Armstrong was entitled to take into account -~ as he said that he did -- both the cost to the newspaper of particular journalists and the need to end up with a suitable spread of journalists in terms of seniority, age, particular skills and

The second comment flows from the first. Questions were put to several of the defendant's witnesses to establish that no formal complaint had been made to Mr Webb about his lack of productivity or unsatisfactory attitude. There was in fact evidence of adverse comments about performance and attitude being made to Mr Webb by a number of people but it 1s true that he had never been put on notice that he would be

dismissed 1f he did not improve. If this were a case where

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only one or more union activists had been dismissed in the wake of a strike, the lack of a final warning would have been a matter of some significance. It would have been a curious coincidence if, at that moment, the company had reached a conclusion -- without any previous warning -- that the journalistic qualities of the activist or activists were so deficient as to warrant his or their dismissal. But I have rejected the manipulation theory. I have accepted that, although at lease the timing of the dismissals was determined by the industrial position, Mr Cowley genuinely wished to cut costs. About 40 people had to be chosen. Those 40 persons not only exceeded the number of persons who could, by any stretch of the imagination, be regarded as union activists or troublemakers; they must necessarily exceed the number of people who had been given a final warning. Indeed, the evidence does not suggest that any journalist then employed by the defendant had been warned to improve his or her performance or to face dismissal. In relation to only a few of the names is there evidence of actual dissatisfaction about performance, with or without complaint by management to the person concerned. Mr Armstrong was in the unhappy position of having to select about 40 persons, upon the basis largely of performance, out of about 150, none of whom apparently had been warned that his or her job depended upon an improved performance. It is not, therefore, significant that one of

the 40, Mr Webb, had never received a final warning.

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Several witnesses gave evidence about the work done by Mr Webb during the period of almost 11 months which elapsed between the cessation of his period as acting chief of staff, in late October 1981, and his dismissal. I have already referred to Mr Armstrong's expressed opinion in relation to Mr Webb's productivity. In addition to Mr Armstrong, Messrs Beeby, Chapman, McCausland and Hampshire worked with him during the whole -- in the case of Mr Chapman, almost the whole -- of this period. By October 1981, three of them, together with Mr Armstrong, already had crossed the great divide into the ranks of editorial executives. Mr Hampshire did so when he was appointed to be chief of staff in March 1982. Nonetheless, all five men were trained and experienced journalists, well equipped and positioned to judge the adequacy -- in terms both of quality and of quantity -- of the material contributed to the newspaper by Mr Webb. In evaluating Mr Armstrong's expressed assessment, it 1s useful to consider the views of the other four witnesses. All four of them gave evidence critical of his performance; not so much in terms of quality but rather in terms oc quantity.

None of them was unremittingly critical. All of these witnesses conceded his ability. They generally agreed that Mr Webb's output during the first few months after his return to general journalistic duties was satisfactory. Some of them

complimented his series of feature articles upon the Family

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Court which was published in late December 1981. All of them praised Mr Webb's performance in breaking,,on 16 April 1982, the first story on what became known as the "colour TV" affair; a matter which resulted in the forced resignations of two Ministers from the then Federal Government. But it was a theme common to all that, at least after that date, the output of Mr Webb was unsatisfactorily low. Mr Beeby commented favourably on some feature articles that Mr Webb wrote upon some sporting personalities early in 1982 -- whilst he was still the editor -- but he said that Mr Webb then ceased to come up with ideas for feature material and concentrated on stories in the Customs area almost to the exclusion of other things. In early May Mr Beeby discussed with Mr Webb the appointment of the latter as an industrial roundsman. He explained in evidence: "I thought he could produce more that way". In the event, Mr Beeby ceased to be editor shortly afterwards and this appointment never occurred. Asked to comment upon Mr Webb's inclusion on the list Mr Beeby said:

that so many people have to be involved -- 40 -- he certainly would have had to be on the list.

Q. Upon what basis? A. On the basis of bis work output and the costs of that output."

Mr Chapman no longer works for the News Limited group. The evidence suggests that, during his period at "The

Australian", he and Mr Webb enjoyed a particularly close

relationship. Those factors give his assessment of Mr Webb's

productivity particular weight. Mr Chapman said that between March and September 1982 he made observations about Mr Webb's productivity:

as much as he ought to." Mr. Chapman said that he spoke to Mr Webb about the matter, telling him that he would have to be seen to be more productive. Mr Chapman particularly complained in his evidence -- and he said that he complained at the time more than once to Mr Webb -- of Mr Webb's unwillingness to do general reporting. He said that he thought that over the

"previous few weeks or months" before his own resignation, in

early September 1982, Mr Webb "had just lost interest in the

Mr McCausland, in his evidence, offered high praise of Mr Webb's work as chief of staff and of his work in connection with the "colour TV" affair. But he said that after that story " he seemed to rest on his laurels. Indeed,

I may say he became -- boastfully indolent would probably

describe 1t -- slack and almost blatantly idle". He went on to state: "his productivity dropped alarmingly. He was a very good reporter and it was a shame to see the -- no stories

coming from him". Mr McCausland described Mr Webb, in his evidence. as appearing to him "to be working hard at appearing

to work hard". He "always had files, always had 'ohone calls

to make'". Between June and August 1982 his performance "had fallen to the extent that he was indeed ripe for dismissal". Mr McCausland said that he spoke to Mr Beeby upon at least three occasions about Mr Webb, referring both to productivity and to attitude. These discussions were said to have taken place in the period between the "colour TV" story and Mr Beeby's departure as editor, the gist of the communications being: "How are we going to get this lazy bastard to do some work?". I interpolate that, although I accept that Mr McCausland did discuss the matter with Mr Beeby, it is very unlikely that he did so three times during the period of about one month which elapsed between the "colour TV" story and Mr Beeby's ceasing to be editor. He may have spoken to Mr Beeby once during that period. If there were subsequent conversations, they are much more likely to have been office chat after Mr Beeby had become editorial manager. Mr McCausland, on his own evidence, did make informal comments to Mr Beeby and others about it being a "Shame and a waste" to see Mr Webb's output decline. The important point is that Mr McCausland expressed contemporaneous dissatisfaction with Mr Webb's output; his present criticisms are not recently

Mr Hampshire is no longer employed by the News Limited group but I bear in mind that he and Mr Webb did not get along well during the period of their common employment on

"The Australian". Even so, there 1s no obvious reason to

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reject his evidence of his contemporaneous dissatisfaction with Mr Webb's output. Mr Hampshire said that he discussed with Mr Beeby -- this must have been in the period March to May 1982 -- his concern about the level of productivity of four senior journalists, including Mr Webb. Of the other three, two were retrenched in September. After speaking to Mr Beeby, Mr Hampshire spoke to each man individually. He told Mr Webb, as he had told the others, that because of a lack of senior and middle ranking staff in the Sydney newsroom, he might be foreed to ask him to cover stories which might normally be covered by more junior reporters and he sought his forebearance should that occur. Mr Hampshire said that, thereafter, on a couple of occasions, Mr Webb acceded to that sort of request without problem, on other occasions he acceded grudgingly and on "quite a few occasions" he proffered an excuse and refused the assignment. After a number of refusals, according to Mr Hampshire: "Basically I gave up. I was new to the job. I had a lot of things going on. There is a thousand things a day that you have to think about, and after I was told something that Mr Webb had said about me I decided that my efforts were better spent elsewhere". Sometime in August 1982, after reviewing Mr Webb's by-line file, Mr Hampshire complained to Sir Larry Lamb and to Mr ' Armstrong about Mr Webb's productivity. Mr Hampshire said that he obtained more news stories from the other senior journalists under his control than he did from Mr Webb. Over

a sufficient period of time to obtain a meaningful average,

say 6 to 12 months, he thought that it was reasonable to expect a senior journalist to be providing in the region of 4 to 5 major stories each week. As will appear, Mr Webb's output was well below this. Mr Hampshire thought that, in the period immediately before the retrenchments, there was an improvement in relation to Mr Webb informing him of his (Mr Webb's) movements, but not in relation to his making himself

To this litany of complaint regarding Mr Webb's productivity, I should add references to the criticisms made by Sir Larry Lamb and by Mr Hogben. Although both men have had extensive experience in the newspaper business, I attach little separate weight to those criticisms. Sir Larry was at "The Australian" with Mr Webb for only about three months. He had little contact with Mr Webb, most of that being upon the matter of his allowances; a matter which -- whether reasonably or otherwise -- appears to have created in Sir Larry some animosity towards Mr Webb. Sir Larry appears to have had no contact with Mr Webb in relation to his work. It is not clear to what extent, if at all, he evaluated either the quantity or the quality of the work that Mr Webb was turning in. Perhaps the most sianificant feature of his evidence, in this connection, is that he spoke of having recelved criticisms, during the period June - September 1982, about Mr Webb's work from a number of the persons who

expressed criticisms before me; including Mr Chapman, Mr

Armstrong and Mr McCausland. With a touch of hyperbole, he summarized their collective view as being, not that Mr Webb

was working too independently, but that 'he was not working at

Mr Hogben had no direct responsibility for the work of the journalists; although I have no doubt that he regularly and avidly read "The Australian", as he claimed. As an old newspaperman he would have had some sense of the sources of the material being published at that time in the newspaper. It is doubtful that he would have been in a position fairly to compare the output of particular journalists or to form a judgment of productivity based upon his daily reading; and, in fairness to Mr Hogben, it must be said that he did not claim to have done so. He gave evidence of having received a complaint from Mr Chapman, some time after Sir Larry Lamb arrived, about Mr Webb. The complaint included reference to Mr Webb's output. Mr Hogben took from the library Mr Webb's by-line file: the file kept by the company in which was inserted a clipping of each story published under the by-line, or name, of Mr Webb. He examined it and reached the conclusion "that he did not do much work";

a conclusion that did not improve his already low opinion of

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Mr Webb gave detailed evidence as.to the work done by him at variqus_stages of the period between the cessation of his position as chief of staff and his dismissal. He conceded that an examination of his published work "calls for explanations as to why output was so low during (a) number of periods". He offered various explanations, although conceding in respect of several periods that his productivity -- as measured by publication -- was poor. I need not attempt a summary of the details of Mr Webb's evidence. It is sufficient to say that I have borne in mind his explanations in evaluating the comments made by the defendant's witnesses and his by-line file. His counsel did not call evidence, from any of his former colleagues, as to the nature or extent of

the work which he was doing during the period under

Counsel for the defendant tendered Mr Webb's by-line file. They also tendered the files relating to 14 other journalists together with a document summarizing, over a period of 43 weeks from 26 October, 1981 to 27 September, 1982, the number of days worked by each journalist, the number of stories in each journalist's by-line file and, by calculation, the average number of items contributed by each journalist each working day. A further document shows the

salary received by each journalist and a salary cost, in

dollar terms, of each by-line item. I have found these

comparisons to be of no value. The journalists selected for the comparison are not necessarily a valid sample. There are difficulties in comparing the output of many of them to that of Mr Webb; especially because of the varying nature of their stories and of their sources of material. It is fallacious to treat each story as being of equal value or as representing equal effort. On the other hand, Mr Webb's by-line file is a useful aid to the assessment of the criticisms made by the defendant's witnesses of his productivity. Various opinions have been expressed upon the question whether the file demonstrated an acceptable degree of productivity; some of the witnesses for the defendant stating that it does not, Mr Webb and Mr John Lawrence, Federal President of the AJA and an experienced journalist, offering the contrary view. Although those opinions are of interest, the file basically speaks for itself. It 1s illuminating because of evidence, which was not disputed, that, at the material time and on "The Australian", virtually everything submitted for publication by a journalist of Mr Webb's seniority would in fact have been published -- although perhaps in an abbreviated form -- and that all the published material of such a journalist would be by-lined. Thus the file contains a very clear guide to the volume of work actually submitted. Moreover, its completeness was unchallenged; Mr Webb having checked it against his personal

file of his published work. As there is no substantial

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complaint about Mr Webb's productivity in 1981, I will confine my analysis to the period from the beginning of February 1982, when Mr Webb returned from three weeks leave, until his

During February "The Australian" published four pieces written by Mr Webb: a feature article on the cricketer Alan Border, a feature article and a news story on wildlife expert Harry Butler -- both obtained during an interview in flight from Perth to Sydney -- and a feature article on the tennis player John Newcombe. During March there were three items -- a second part of the feature on Mr Newcombe, a feature article on Grant Torrens, water skier, and a short news item relating to a call by Customs officers for a public inquiry into the conduct of investigations into the Nugan Hand bank. April was more fruitful, producing 14 stories, all news items: three relating to the affairs of the Nugan Hand group, ll relating to the "colour TV" affair -- the 'break' story together with follow up stories about consequential political developments, comment and a profile of a Customs officer. No witness criticised the extent of Mr Webb's output in April but it may be remarked that many of the stories on the "colour TV" affair would have involved little more than straightforward reporting of Parliamentary proceedings and comments about the affair by various people. The initial story itself came from

information supplied by Customs officers rather than from

detailed investigation. During May, five pieces were

published: a short article on violence in children's football, gleaned almost entirely from the experiences of Mr Webb's sons, three stories on facilities afforded by Customs officers to Federal Ministers -- one an account of a contemporary incident, as reported by Customs officers, and two relating to an incident said to have occurred in November 1972 -- and an article commenting upon the short films entered for awards at the 1982 Sydney Film Festival; which films were all screened in a single day. Im June, six items of Mr Webb were published: four being reports of a single day's proceedings in a committal hearing of charges arising out of the Nugan Hand investigation, a fifth being an article for "The Weekend Australian" summarising those proceedings and the last a report of the contents of various submissions made to an inquiry into Customs administration and procedures. In July 12 stories were published: a short item about a review by the New South Wales Law Reform Commission of the law relating to de facto couples, together with a longer exposition -- which drew heavily upon submissions to the Commission -- for "The Weekend Australian", an article relating to the importation of pornographic film material and apparently arising out of a submission made to the Customs inquiry, two articles reporting criticisms by Customs officers of the handling by Australian Federal Police officers of drug operations, two news items relating to a day's proceedings at the Customs inquiry and four news items each relating to a

single day's hearing before the Stewart Royal Commission,

together with a short article' about Mr. Justice Stewart. Some of these stories may have required reference to, transcripts of the Stewart Royal Commission, which transcript Mr Webb had obtained at the cost of the defendant and with the approval of his superiors. The month of August commenced with a flourish, four items being published in the first week. They consisted of an article -- which may not unfairly be called a "rehash" of known material -- about Customs abuses by officials and three news items relating to a day at the Stewart Royal Commission. Nothing further was published until August 23, when Mr Webb had a short item arising out of his attendance during the previous weekend at a seminar in Melbourne on de facto relationships. During the first half of September, before the Van Oudtshoorn strike took effect, five items were published: an article for "The Weekend Australian" about views expressed at the defacto relationship seminar, two news items reporting complaints by Customs officers about irregularities, another report of a day at the Stewart Royal Commission and an article reporting the findings of a dectorial study into the effect upon children of forensic

In evaluating this material I bear in mind that I have had no experience as a journalist. I have no doubt that,

as was emphasised both by and on behalf of the prosecutor,

there is a deal of unproductive work in the life of a

journalist: story ideas which have to be abandoned, abortive

telephone calls, interviews which yield no material, the cultivation of contacts and the carrying out of background reading. The background material available to Mr Webb included the voluminous transcript of the Stewart Royal Commission, although it was never made clear just how much of that transcript Mr Webb had found it necessary to read. Under cross-examination he conceded that "he did not read much of it". Having taken into account all of those factors, I conclude that the view that Mr Webb's output was less than might reasonably be expected of a senior journalist was well open to Mr Armstrong. Whatever the reason why Mr Webb chose to work at less than his apparent capacity, the criticisms made by the defendant's witnesses in relation to his productivity are justified. The volume of material for the months of April and July might be regarded as satisfactory, although hardly taxing to a journalist of Mr Webb's experience and talent. The output during each of the other months under review might be thought to be well below what reasonably might be expected. I say this not solely, or even mainly, by reference to the number of items. I well appreciate -- especially at this stage of this judgment -- that the preparation of a single piece May represent much more work than the preparation of a number of shorter, more straightforward pieces. I have considered carefully each of the published items and the comments made by the various witnesses, including Mr Webb, regarding them. I have

considered the amount of work involved in the production of

those items. Without detailing my view about each single item I simply say that an examination of the totality of Mr Webb's output over the concluding seven and a half months of his employment supports the views of those witnesses who found the

The complaints about attitude divide into two categories; to work and to those having authority over him. The two are linked. It was a recurrent theme that Mr Webb would not make himself available to the chief of staff for general reporting duties. He maintained, both during 1982 and in his evidence, that he was engaged upon the understanding that he would be responsible directly to the editor for special projects and that he would not have to undertake day to day assignments allocated by the chief of staff. This term was not included in the letter, previously mentioned, setting out the conditions of his employment. Its existence was denied by Mr Beeby, who engaged Mr Webb, both during 1982 and in his evidence. Whilst Mr Beeby was still editor, and shortly after Mr Hampshire became cl.ief of staff, Mr Hampshire came to him with a complaint that Mr Webb would not take directions from him. Mr Beeby spoke to Mr Webb and instructed him to take instructions from Mr Hampshire. Mr Webb replied that he had no problems about that but, according to Mr

Hampshire, the position did not improve. After Sir Larry Lamb

arrived, Mr Hampshire made a similar complaint to him. Sir Larry made an enquiry through Mr Chapman, who reported that Mr Webb claimed a special arrangement. Sir Larry checked with Mr Beeby, who denied any such arrangement. He told Mr Chapman to instruct Mr Webb to take instructions from Mr Hampshire. Mr Chapman did so. He said in evidence that Mr Webb's reaction was "adverse". According to Mr Hampshire, there was no

The effects of the position taken by Mr Webb are well illustrated by some evidence given by Mr Errol Simper. Mr Simper is an Al journalist, still employed at "The Australian" . - He was called by the defendant in answer to a comparison made between the number of stories revealed by his by-line file as compared with that of Mr Webb. His evidence demonstrated that the comparison was of little value because, during much of the relevant period, he had been involved in various administrative functions. One of these duties was as acting chief of staff, immediately before Mr Hampshire's appointment to that position. Asked about his dealings, in that capacity, with Mr Webb he replied that Mr Webb "appeared to be running his own race". He mentioned a particular occasion when he was "very strapped for staff". He was toid that somebody was coming into the office with "a good story which we had to cover" but he had no staff available. He

"I looked around the newsroom and the only person

I could see was John sitting at his desk. I seem to recall going up to him and asking if he

about 'That is your problem' and I did the story myself."

Mr Simper's story was published the next day. Mr Webb in his evidence denied this incident but he agreed that, if it had occurred, he would have been "guilty of an arrogant refusal to do (his) duty". I accept Mr Simper's evidence. He had no occasion to invent the incident. It tallies with Mr Webb's own evidence that he can recall no occasion during 1982 when he carried out a 'spot' assignment. I think that he has himself correctly described the manner in which his attitude

Mr. Webb's attitude to work was reflected also in evidence given by Mr McCausland that on one occasion, as he approached Mr Webb's desk, he heard him say "I will not do more than one story a day". Mr McCausland said that he intervened, saying: "Oh come on, John, we are more professional than that". Mr Webb responded: "No, I'11l never do more than one story a day". Some days later, at the Journalists Club, Mr McCausland said that he overheard a conversation between Mr Webb and Mr Toshack, the then deputy

chief sub-editor who was subsequently retrenched at Sir Larry

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74, Lamb's instigation. Mr McCausland said that he heard Mr Webb say: "A good union member will never write more than one story a day". Mr Toshack replied: "Bullshit. You know we are here to produce a newspaper". Mr Webb denied both the incidents recounted by Mr McCausland. In evidence he said that, after he heard Mr McCausland's evidence, he contacted Mr. Toshack, who is still working in Sydney. Mr. Toshack was not called to give evidence. I see no reason to doubt the evidence of Mr McCausland and I accept that the incidents occurred.

A number of witnesses gave evidence that they had heard reports of a derogatory description of Mr Hampshire by Mr Webb to Mr Chapman. When he gave evidence, Mr Chapman did not recall -- or was unwilling to recall -- any specific epithet, but he did recall derogatory comments from time to time by Mr Webb concerning Mr Hampshire. Mr Webb conceded that on one occasion he called Mr Hampshire "a fuckwit". Too much may be made of this. I have no doubt that, from time to

time, personal stresses arise in a newspaper office and that

unfortunate terms are used. No doubt gossips pass them on. In a rough and tumble environment, given basic respect, such

incidents are not necessarily of great concern. The more serious matter, as it seems to me, was Mr Webb's general attitude to Mr Hampshire. He conceded in evidence that he thought Mr Hampshire to be generally inept and that he freely

expressed that view to others. This attitude, combined with

his continued refusal to accept instructions from Mr Hampshire as chief of staff, must have been humiliating to Mr Hampshire and undermining of his authority over other journalists. I

can easily accept the criticisms that Mr Webb's attitude

constituted a "source of discontent" -~ Sir Larry Lamb -- that it had "a bad effect on morale" -- Mr McCausland -- and that it "undermined morale" -- Mr Hampshire.

This review of the evidence brings me to the critical question whether Mr Armstrong should be accepted in saying that he placed Mr Webb upon the retrenchment list because of the facts that he was very highly paid, that he was not very productive in the sense that he did not contribute very often, that his range of interests was narrow and, as a subsidiary matter, that nis attitude was unsatisfactory. I see no reason why that evidence should not be accepted. It is true that Mr Armstrong and Mr Webb had crossed swords on a few occasions; once during 1981, whilst Mr Webb was chief of staff, over the publication of a story about a hunger striker, perhaps once in September 1981 in respect of the resignation of a journalist named Bashford, once late in Mr Beeby's editorship about the amount of space to be given to a story written by Mr Webb and, although Mr Armstrong said that he did not recall any involvement of Mr Webb in the incident, possibly in relation

to a complaint made by the sub-editors at the beginning of

September 1982. There was some feeling between the two men in respect of at least a couple of these incidents but the clashes were in a professional context. Mr Armstrong said that on no occasion was there lasting animosity, that neither he nor Mr Webb was the type to bear a grudge. Mr Webb did not suggest otherwise. I do not think that any of those incidents would have so warped Mr Armstrong's attitude to Mr Webb as to cause him, years later and after he had moved to a more senior position with another employer, to give false evidence as to his reasons for listing Mr Webb. -I was impressed by Mr Armstrong as a witness. I thought that he gave his evidence fairly and honestly. I accept his evidence that he was not influenced by Mr Hogben's comment regarding Mr Webb but that he applied his own mind to the question as to whether Mr Webb should be one of those included on his list. His ascribed reasons are shown to be not without foundation. It is the fact that Mr Webb was very highly paid, by comparison with other journalists employed by the defendant. Mr Armstrong was in an excellent position to assess his productivity. I have already found that it would have been open to him, acting reasonably, to find Mr Webb's level of productivity unsatisfactory. My analysis of the content of the material contributed by Mr Webb supports the view that it spanned a narrow range of interests. There is room for fair criticism

of Mr Webb's attitude both to his work and to at least one of

his superiors and there is evidence that both Mr Chapman and

Mr Hampshire had made Mr Armstrong aware of that attitude.

ne BT ea ee er ae ee ee ween ee Me fee ~e ' Ae et ene

As things turned out, the ultimate.decision as to the persons to be retrenched rested with Sir Larry Lamb. Nobody in management sought "to amend his list. It appears that Sir Larry did not like Mr Webb but -- to the extent that he addressed himself at all to Mr Webb's fate -- there is nothing to indicate that Sir Larry was influenced by Mr Webb's union activities. He said in evidence that, although he knew that Mr Webb held some kind of union office, he was "not particularly conscious of him as a union activist". There is no evidence to suggest otherwise. On the other hand, Sir Larry had a poor view of Mr Webb as an employee; he thought that his productivity was "very low" and that he was not amenable to discipline. There is no reason to doubt that Sir Larry's concurrence in the inclusion upon the list of Mr Webb's name stemmed from these matters, rather than from any

cause proscribed by S.5 of the Conciliation and Arbitration

The conclusions I have expressed make it strictly unnecessary for me to consider whether, in any event, the union activities upon which Mr Webb had been engaged were activities referred to in s.5 However, as the matter was fully argued, I will state shortly my view upon that question. It is necessary to consider separately each of the relevant

Paragraph (a) refers to the circumstance that the employee "is or has been, or proposes, or has at any time proposed, to become an officer, delegate or member of an organization". The word "officer" is not defined by the Act but "office" is defined, in relation to an organization or branch of an organization, by s.4 of the Act, to include "tHe office of a member of the committee of management of the branch", (para.(a)), "the office of ... vice president ... of the ... branch, (para.(aa)), and "the office of a member of any ... committee ... within the organization or branch which, under the rules of the organization ... is empowered ... to exercise any of the functions of management", (para.(c)). Subject to the matter of eligibility for election as a vice-president already discussed, I think that, as at the date of his dismissal, Mr Webb held each of these offices; and consequently, in respect of each of them, was an "officer" within the meaning of s.5. He was elected to the branch committee on 23 March 1982. He continued to hold office as an elected member of the committee until the Annual General Meeting which was held on the night before his dismissal, when he was declared a branch vice-president and, ex officio, a member of the branch committee. From 27 May 1982 until his dismissal Mr Webb was a member of the News Limited house committee, a committee within the organization, and the branch, which was empowered -- by rule 36A quoted above -- to

exercise some of the functions of management of the branch.

However, there is nothing to suggest that Mr Webb attracted hostility towards himself, or on any view placed his employment at risk, simply because.of his status as an

"officer". On no view of the evidence could it be said that

Paragraph (d) of s.5(1) refers to the circumstance that the employee "being a member of an organization which is seeking better industrial conditions, is dissatisfied with his conditions". The defendant sought particulars of the "better industrial conditions" relied upon by the prosecutor in relation to this paragraph. The prosecutor referred to the then current log of claims for a new award and added:-

employees of the Defendant were not liable to be threatened and/or to be the subject of inaccurate and/or insulting memoranda by senior officers of the Defendant, and/or

(c) Conditions in which there was regular, full and frank consultation on industrial conditions hetween

reoresentatives of the Defendant and of its journalist employees". ~

contend that there is no basis, upon anyone's view of the facts, for ascribing Mr Webb's dismissal to the then current award negotiations. Those negotiations were being undertaken on behalf of the union by the various branch secretaries. It is true that, from time to time, there was a stoppage of work

in support of the union's claims by the journalists eamployed

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by the defendant. Mr Webb was involved in those stoppages but he is not shown to have played any significant role in relation to them or to have attracted towards himself, in that

connection, any special notice or hostility. It is not

_ possible to relate his characterization by management as being

industrially disruptive to the pursuit by the union of its claim for the new award. As Northrop J. pointed out in Heidt, at p.270, to come within para.(d) "the employee member must be dissatisfied with the same industrial conditions" as the organization is seeking to better. There must be a causal connection between the member's dissatisfaction with those conditions and his dismissal. Whatever may have been Mr Webb's opinion regarding the matters the subject of the award negotiations -- as to which there is no direct evidence -- it was not any dissatisfaction with the course of those

negotiations which earned him the reputation of being

In relation to the matters set out in paras.(b) and (c) of the particulars quoted above, counsel for the defendant submit that they are not capaple of being described as the pursuit of "better industrial conditions". I do not see why they are not. It may be that an isolated complaint by a union, or by its members, relating to the conduct of a person in'authority is not a pursuit of better "conditions". But the evidence indicates that there existed in the News Limited

offices a recurring problem of poor communications and lack of

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respect as between some members of management and some members of the union. The Sue Short dispute, the "apology to readers" incident and the Van Oudtshoorn affair were but dramatic manifestations of this unhappy situation. The letters of Mr Cantlon, to which I have referred, sought discussions to improve the situation. His most recent letter had been sent only five days before the dismissal. "Industrial conditions" is a phrase of wide content, apt to include all aspects of the relationship between employer and employee, as such. I see no reason to exclude from it the state of good communication and personal harmony between persons at different levels in the hierarchy of the company. Personal relationships may be as important as physical conditions in the attainment of job satisfaction. In _Federated Clerks Union of Australia v.

Victorian Employers Federation (1984) 54 A.L.R. 489, the High

Court held that a power to make an award relating "to any industrial matter whatsoever" was sufficiently wide to authorize provisions requiring consultations in respect of technological changes. All members of the Court held that it was fundamental to the notion of an "industrial matter" or an "industrial dispute" that the matter or dispute pertain tou the relationship between employer and employee as such. There was some difference of opinion as to the extent that a matter of Management might be an "industrial matter" but the view of, at least, the majority of the Court seems to have been that a matter pertaining to management might be an "industrial

matter", at least provided that it did not usurp the

a2. employer's prerogative to make final management decisions: see Mason J. at pp. 500-503, Murphy J. at p.504 and Wilson J. at p.509. Although Gibbs C.J. thought that the making of an operative decision was a management function, not an "industrial matter", his Honour held that an obligation to notify the union as to the decision and to consult with it in regard to its implementation was nonetheless an "industrial matter". The phrase "industrial matter" is wider than "industrial conditions", so that the decision in the Federated Clerks case is not directly applkicable. However, I think that the approach taken by the High Court in that case is supportive of the view that, in a contemporary context, a term such as "industrial conditions" should be construed liberally and so as to embrace arrangements for consultation between employer and employee in relation to matters arising out of that relationship and relevant to the working environment of employees, as such. The evidence shows that the union was actively seeking better industrial conditions, in this sense, both before and at the time of Mr Webb's dismissal. Mr Webb was actively involved in the union's search; whether constructively or otherwise may be another question. Subjectively he was dissatisfied with the existing position. It was because of his involvement in these matters that he became known as "industrially disruptive" anda "troublemaker". Had he been placed on the retrenchment list because of the activities which earned him that reputation, I would have found the reliance upon para.(d) to have been made

Paragraph (f) of s.5(1) refers to the circumstance that the employee," being an officer ... or member of an organization, has done ... an act or thing which is lawful for the purpose of furthering or protecting the industrial interests of the organization or its members, being an act or thing done within the limits of authority expressly conferred on him by the organization in accordance with the rules of the organization". The actions taken by Mr Webb, and which contributed to his reputation for being industrially disruptive, were not authorized by the rules to be undertaken by mere members of the organization. In relation to his position as an "officer" of the organization, I note that at the time that he performed the actions he was not a branch vice-president. The question, then, is whether his actions were actions undertaken by him as a member of the branch committee, or alternatively of the house committee, within the limits of authority conferred upon him in that behalf by the A.J.A. rules. The authority of the branch committee 15 a wide one. Under rule 25 it has the power "to administer and manage the affairs of the Branch". It exercises the full powers of the branch between general meetings. However, that authority is vested in the committee as a collective body. Rule 25 confers no authority upon a member of the branch committee, as such. It may be that the branch committee, at a duly

constituted meeting, could delegate to one of its number power

to take action on its behalf. There appears to be no

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difficulty about describing an action undertaken under such circumstances as being an action "within the limits of authority expressly conferred on him by the organization in accordance with the rules". But there is no evidence in this

The situation in relation to Mr Wéebb's membership of the house committee is a similar one. That committee has the function, under r.36A(b), of advising and assisting the branch in relation to "matters concerning the industrial and professional interests, welfare and conditions of employment of members". The "better industrial conditions" discussed in relation to para.(d) were such "matters". To pursue within the offices of News Limited those matters, in relation to which the branch was pressing, may be regarded as assisting the branch committee. But the rule confers authority upon the committee as a collective body and not upon individual members. I do not think that the case could, on any view of

I have indicated that I accept the evidence of Mr Armstrong and of Sir Larry Lamb that Mr Webb's union activities played no part in their decision to include him upon the list of persons nominated for retrenchment. It

follows that the defendant has made out ats claim that those

activities were not "a substantial and operative factor" in his dismissal. The information must, therefore, be dismissed. Under those circumstances, it is unnecessary for me to consider whether this is a case in which, if the allegations in the information had been made out, it would have been a

proper exercise of the discretion of the Court to order

Section 197A of the Conciliation and Arbitration Act provides that a party to a proceeding before "the Court" ina matter arising under the Act shall not be ordered to pay any costs incurred by any other party to that proceeding "except where the party against whom the order is made instituted the proceeding vexatiously or without reasonable cause". For the purposes of that section "the Court" includes this Court: see Brophy v Mapstone (1984) 56 A.L.R. 135 at pp.146-148. A party cannot be said to have commenced a proceeding "without reasonable cause" simply because that proceeding has failed. If the case was worthy of consideration, there was reasonable

cause for commencement: see The Queen v. Moore and others;

ex parte Federated Miscellaneous Workers Union of Australia

(1978) 140 C.L.R. 470 per Gibbs J. at p.473. That is this case. The ultimate result has depended upon evidence -- "primarily that of Mr Armstrong -- given during the hearing of this matter. At least until that evidence was given, there was ample basis, especially having regard to the statements

made in his radio interviews by Mr Murdoch, for the suspicion

that the dismissal of the prosecutor might have represented a breach of s.5. There was ceasonable cause to institute the proceeding. "rt follows that, notwithstanding that the proceeding fails, there may be no order for costs in favour of

Vhe information should be dismissed, with no order as

Io certify that this and the eighty-five (85) preceding pages are a true cony of