Wesfarmers Premier Coal Limited v The Automotive Food Metals [2004] FCA 1737 | Case summary

(d) all persons who, at any time when the agreement is in operation, are employed in a single business, or a part of a single business, of the employer and whose employment is subject to the agreement.' The Nature of the Proposed Agreement referred to in the Protected Action Provisions of the Workplace Relations Act 54 Section 170MI(1) provides, inter alia, that if an organisation of employees 'wants to negotiate an agreement under Division 2 or 3' then it may initiate a bargaining period 'for negotiating the proposed agreement'. The notice required by s 170MI(2) is a written notice that the initiating party 'intends to try ... to make an agreement with the other negotiating parties ... and to have any agreement so made certified under Division 4'. The notice must, by virtue of s 170MJ, be accompanied by particulars of '... the matters that the initiating party proposes should be dealt with by the agreement'. 55 These provisions give content to the words 'proposed agreement' in s 170MI(1). The 'proposed agreement' referred to in that subsection is 'an agreement' that the initiating party 'wants to negotiate'. The initiation of the bargaining period is not therefore conditioned on the existence of a draft agreement proposed by the initiating party which, if signed then and there by the negotiating parties, could be certified. This is made clear by s 170MI(2) which contemplates an intention by the initiating party to negotiate 'an agreement'. That generic term allows for a variety of possibilities including that: (a) The initiating party has little or no idea of what the final agreement will contain but is open to a variety of outcomes. (b) The initiating party intends to secure an agreement containing certain terms and conditions but is open to a variety of possibilities for the balance of the agreement. (c) The initiating party intends to secure an agreement based on terms and conditions which it has formulated as a draft for discussion. 56 The 'proposed agreement' in s 170MI(1) therefore is used in a generic sense to describe the desired outcome which is 'an agreement'. The requirement that the particulars accompanying the initiating notice specify the matters that the initiating party proposes should be dealt with does not demand a specification of terms and conditions but rather of topics. Nor does it require that the matters be exhaustive of all matters that could find their way into a final agreement. These provisions govern the beginning of a process of negotiation. It would be antithetical to their objects to require that the initiating party have defined an agreement capable of certification from the outset. 57 If industrial action taken by an organisation during the bargaining period is to be protected, it must be taken to 'support or advance claims made in respect of the proposed agreement'. Counsel for Premier Coal argued that the 'proposed agreement' referred to in s 170ML(2)(e) is nothing less than a draft capable, if executed, of certification under the Act. Counsel accepted that, on his argument, neither a log of claims, nor heads of agreement, nor a partial draft with 'blanks' would suffice. He relied upon the joint judgment of Gummow, Hayne and Heydon JJ in the Electrolux case. He submitted that the legislative purpose supporting that construction was to provide certainty to the employer about the objectives of the organisation taking the industrial action. It may be said immediately that that certainty could be achieved by an awareness on the part of the employer of the 'claims' which the union sought to support or advance. It would not require the unveiling of a complete draft agreement before action was taken. 58 The Minister's position was the same as that of Premier Coal. Counsel for the Minister accepted that, upon the construction she advanced, every party to negotiations would have on the table a complete document containing all the claims they wanted to advance - a log of claims incorporated, in effect, in an agreement in certifiable form. 59 I do not accept that construction. In my opinion, consistently with the use of the words 'proposed agreement' in s 170MI, the 'proposed agreement' in s170ML(2)(e) is the desired end point, described generically, of the negotiation process. It does not require that there be in existence a draft of a certifiable agreement which has been prepared or is proposed by the organisation undertaking the industrial action. On the other hand, it does not exclude the possibility that industrial action may occur at a point when such a draft has come into existence. 60 Some aspects of the 'proposed agreement' from an organisation's perspective will be identified by the particulars set out in the Notice Initiating the Bargaining Period. In the present case the particulars accompanying the first notice took the form of a log of claims. 61 The protection afforded to industrial action under the Act is limited by the requirement that any proposed agreement in respect of which it is brought is capable of certification under Div 2 of Pt VIE. By s 170LI an application for certification must relate to 'an agreement in writing about matters pertaining to the relationship between ... an employer who is a constitutional corporation ... and ... all persons who at any time when the agreement is in operation, are employed in a single business or a part of a single business of the employer and whose employment is subject to the agreement'. The requirement that the agreement be about matters 'pertaining to' the employer-employee relationship means, inter alia, that industrial action is not protected if made for the purpose of supporting or advancing a claim for the inclusion in a proposed agreement terms and conditions that do not pertain to that relationship. 62 It is important in this, as in all cases, to have regard to the particular factual situation to which the law is being applied. In considering the Electrolux decision, attention must be given to the facts of that case before extracting from it large propositions applicable to a variety of circumstances which were not before the Court. As appears from the joint judgment of Gummow, Hayne and Heydon JJ at [140], the AMWU (Cth), in the course of negotiations for a Div 2 agreement 'presented a draft on its behalf and that of the other unions'. One of the clauses in the draft provided for the payment by employees and the collection by the employer of a Bargaining Agents Fee to be paid to the union. Although their Honours' judgment does not make it explicit, it was common ground before the trial judge, Merkel J, that the industrial action taken by the unions was for the purpose of supporting and advancing claims in respect of the proposed agreement. His Honour also found that the evidence was that the unions were pursuing, inter alia, the Bargaining Agents Fee which the employer, Electrolux, regarded as non-negotiable - Electrolux Home Products Pty Ltd v Australian Workers' Union [2001] FCA 1600. 63 In construing s 170ML(2)(e) the joint judgment said at [152]: 'The "proposed agreement" is identified in s 170MI(1) as that which the imitating party, in this case the unions, "wants to negotiate", being "an agreement under Div 2 or 3".' Their Honours referred to the requirements for certification under Div 2. Then at [156]: 'In the present case, "the proposed agreement" identified in s 170ML(2) is not simply that which the unions wished to negotiate. There must be an agreement which would, as indicated in s 170LH, satisfy the requirements for the making of an application to the AIRC for certification. Those requirements, to attract the jurisdiction or authority of the AIRC, include the nature of the agreement mandated by s 170LI(1). Hence the critical nature for this case of the phrase "about matters pertaining to the relationship" between Electrolux and its employees whose employment is subject to the proferred agreement.' In that case the agreement had been proferred and industrial action taken to advance claims reflected in the terms and conditions of that agreement, including the Bargaining Agents Fee term. There is nothing in the reasoning of the majority which requires that a draft agreement must be proferred by the party taking industrial action in every case if the party is to attract the protection conferred by the Act. To extract such a proposition from the reasoning of the Court is to elevate contextual references to the facts of the particular case to a rule of construction applicable to all cases. 64 Gleeson CJ said (at [25]): 'The reference in s 170ML(2) to "the proposed agreement" is a reference to an agreement of the nature identified in s 170LI. The fact that parties to industrial action may be acting under a mistake of law as to whether a proposed agreement is of that nature is no more relevant to the protection given by s 170ML(2) than would be the fact that they neither knew nor cared whether the proposed agreement was of that nature. The protection conferred by s 170ML(2) is attracted by a combination of two circumstances: the purpose of supporting or advancing claims the subject of a proposed agreement; and the nature of the proposed agreement. The kind of proposed agreement being supported is not at large. It is not merely the fact of the proposal and support that is sufficient to gain protection; the nature of that which is proposed is also material.' His Honour identified the statutory purpose of the protection and immunity conferred by the Act as the facilitation of the making and certifying by the Australian Industrial Relations Commission of certain agreements, and continued: '... that protection and immunity does not extend beyond action in support of agreements of the nature of the agreements with which Pt VIB is concerned, that is to say, agreements of the kind identified in s 170LI.' 65 McHugh J said (at [113]): '... the "proposed agreement" identified in s 170ML(2) must be an agreement which would satisfy the requirements for the making of an application to the commission for certification. Those requirements include the nature of the agreement that is mandated by s 170LI(1).' Callinan J did not expressly deal with the point, save by stating at [239] his preference for the reasoning of the trial judge over that of the Full Court. 66 The judgments of the High Court in Electrolux do not require that before protected action can be taken the organisation taking it must be doing so in pursuit of, or in relation to, a proposed agreement which is, in effect, complete and capable of execution and certification. 67 The question whether industrial action which has been taken has been taken for the purpose of advancing claims made in respect of a proposed agreement of the kind contemplated by s 170ML(2)(e) is a question of fact and law. If it be the case that industrial action is taken to advance a discrete substantive claim which does not pertain to the employer-employee relationship, then it does not matter how comprehensively or incompletely the union has formulated proposals for other terms and conditions. The claim advanced would itself mark the 'proposed agreement' as one which could not fall within the scope of the section. For, by its inclusion, any agreement, however otherwise drafted, would not be certifiable. If, on the other hand, the claim for which industrial action is taken is within the employer-employee relationship then the question whether the 'proposed agreement', including such a claim, would be within or outside the scope of the section must be determined by reference to other factors. 68 In the present case, in my opinion, the 'proposed agreement' contemplated by the AMWU (Cth) at the time of the first industrial action in July, was an agreement which would have included matters of the kind set out in the particulars which accompanied its first notice of initiation of bargaining period and the amended log of claims which it provided subsequently. The proposed agreement at the time of the industrial action in October was an agreement which would have contained matters of the kind set out in the second notice. These included, by reference, the matters 'already agreed between the parties'. Those matters could be identified, at least in part, by reference to the draft agreement dated 31 August 2004. I use the term 'matters of the kind' advisedly to recognise that some elements of the log of claims were by way of ambit claims and would not support any inference of any serious intention or expectation of their inclusion, as framed, in a final agreement. 69 There is a further constructional question. That is whether industrial action, brought to advance claims which pertain to the employer-employee relationship, is protected action notwithstanding that the agreement 'proposed' at that point will include matters which do not pertain to that relationship. In my opinion, the term 'claims made ... in respect of the proposed agreement' imports the condition that they relate to an agreement which, so far as it goes, at that point is not disqualified from certification by reason of any of the matters with which it deals. That is to say if there are other matters which would preclude certification whether they are to be inferred from a log of claims or otherwise, or even agreed, the claims advanced or supported will not have been made in respect of a proposed agreement of the kind contemplated by the Act. 70 The new validation provision, s 170NHBA, focuses upon the character of the claim intended to be supported or advanced by the industrial action. This might reflect an assumption by the parliamentary draftsman that the scope of protected action is defined by reference to the character of the claims advanced or supported, rather than the character of the proposed agreement to which they relate. There is support for the proposition that the construction of a statute may be affected by assumptions about its construction apparent in subsequent legislation or amending legislation. See Pearce and Geddes, Statutory Interpretation in Australia, 5th Edition (Butterworths 2001) pars 3.30-3.32 and in particular see Grain Elevators Board (Vic) v Dunmunkle Corporation (1946) 73 CLR 70. In this case, however, the construction of s 170ML(2) adopted by the High Court in Electrolux indicates that the character of the 'proposed agreement', whether it be settled or inchoate, is critical to the question whether the relevant action is protected. That construction cannot be overcome by a statutory interpretation based upon a subsequent amendment. 71 The practical implication of the preceding approach to the construction of s 170ML(2) may be that parties contemplating industrial action will need to consider carefully whether all the elements of their proposed agreement identified to that point, whether by a log of claims, draft agreement or otherwise, are compatible with the requirements for certification, that is to say that they pertain to the employer-employee relationship. 72 In the light of these conclusions it is necessary to consider the contentions advanced by Premier Coal in support of the particular declarations which it seeks. The Test for Whether a Matter Pertains to the Employer-Employee Relationship 73 The relevant requirement of s 170LI(1) is that, in order to be certified, an agreement must be 'about matters pertaining to the relationship between ... an employer ... and all persons who ... are employed in a single business or part of a single business of the employer'. The connection between the 'matters' referred to and the employment relationship is that they must 'pertain' to that relationship. The word 'pertain' has had a history of judicial exegesis in jurisprudence relating to the concept of 'industrial dispute'. As pointed out in the joint judgment of Gummow, Hayne and Heydon JJ in Electrolux at [158], the definition of 'industrial matters' in s 4(1) of the Conciliation and Arbitration Act 1904 (Cth) was a cognate definition to that of 'industrial dispute' and stated that the defined term meant: '... all matters pertaining to the relations of employers and employees'. This was so drawn as to reflect reliance by the parliament on s 51(xxxv) of the Constitution. The provisions of the Workplace Relations Act with which the Court is here concerned are based upon the corporations power. Nevertheless the parliament by using, in s 170LI, language drawn from the definition in the Conciliation and Arbitration Act 1904 may be taken to have intended the words to carry the meaning attributed to them in judicial interpretation of that provision. It is sufficient for present purposes to refer to the salient observations in Electrolux about the requirement that a matter dealt with by an agreement 'pertaining' to a relationship. 74 In the judgment of Gleeson CJ at [9] his Honour said: 'The established principle, however, is that, in the context with which this legislation is concerned, it is matters which affect employers and employees in their capacity as such that "pertain to the relations of employers and employees".' At [10] his Honour restated the well established proposition that 'the relations of employers and employees' refers to their industrial relationship and not to matters which have 'an indirect, consequential and remote effect on that relationship' - R v Portus; Ex parte ANZ Banking Group Ltd (1972) 127 CLR 353 at 359 and 362; R v Kelly; Ex parte Victoria (1950) 81 CLR 64 at 84. 75 McHugh J at [81] said that for an agreement to be certified it must be about matters pertaining to the relationship between employers and employees 'in their capacity as such'. At [89] his Honour referred to 'the test of sufficient direct effect on the employment relationship' as 'the key to the statutory limitation in s 170LI'. 76 In their joint judgment, Gummow, Hayne and Heydon JJ referred at [161] to the judgment in Alcan and its acceptance of the principle in Portus that for a matter to 'pertain to the relations of employers and employees' it must 'affect them in their capacity as such'. 77 Callinan J at [241] said: 'Whether the agreement pertains to the relationship between an employer and employee is to be objectively determined by the court.' 78 The essential principle emerging from these judgments is that a matter pertains to the employer-employee relationship if it affects employers and employees in their capacity as such. The term was otherwise expanded in R v Kelly at 84: 'The words "pertaining to" mean "belonging to" or "within the sphere of" and the expression "the relations of employers and employees" must refer to the relation of an employer as employer with an employee as employee.' It has also been said that a provision of an agreement does not pertain to the employer-employee relationship if it concerns academic, political, social and management matters - Electrolux at [60] per McHugh J and at [245] per Callinan J. 79 The question whether a matter affects the relations of employer and employee in their 'capacity' as such has the potential to generate arcane debates about characterisation particularly where a person may be affected in more than one capacity. The Court should not be astute to propose elaborate sub-principles to guide that characterisation. The process should be kept as simple and as straightforward as its language and judicial exegesis permits having regard to the practical consequences that may attend error. Whether the July Strike was Protected Action 80 Premier Coal submitted that at the time of the July strike there was no 'proposed agreement' within the meaning of s 170ML(2) with respect to which any claim could be supported or advanced. The draft document of 9 July was a draft Enterprise Agreement for registration under the State CIT and was not intended to be an agreement that complied with the requirements of s 170LI. 81 Premier Coal then made a fallback submission that if there were a proposed agreement relevant to the July strike and if it were the agreement proposed for registration under the CIT, then it contained matters that did not pertain to the employer-employee relationship. A number of provisions in the 9 July draft were cited as extraneous to the relationship. They were:

Clause 3(3) relating to the application of the agreement to a proposed Char Plant.
Clause 31 relating to leave and payment for attendance at union meetings.
Clause 32 relating to the engagement of contractors.
Clause 34 relating to union rights of entry.
Clause 35 relating to redundancies.
Clause 37 relating to local government representation. 82 Premier Coal also invoked s 170MP and said that the condition imposed by s 170MP(1)(a) was not met in that the respondents had not genuinely tried to reach agreement with it. It accepted however that negotiations undertaken before the initiation of the bargaining period were relevant to the question whether there had been a genuine attempt to reach agreement - AMIEU v G & K O'Connor Pty Ltd (1999) 91 IR 355 at 361-363 (Marshall J). 83 The entry into force of the Workplace Relations Amendment (Agreement Validation) Act raised something of a threshold question affecting the attack on the July strike. Assuming it could be said that one or more of the respondents arranged or engaged in the industrial action undertaken in July, the question is whether it would have been protected action but for the fact that it was undertaken for a purpose of supporting or advancing a claim that was not a permitted matter. Premier Coal said first that the action was not protected notwithstanding the Workplace Relations Amendment (Agreement Validation) Act because there was not in evidence a 'proposed agreement' being an agreement, at least in draft, capable of certification. For the reasons already given, I reject that proposition. No such agreement is required to attract the application of the protected action provisions of the Act. 84 Then it is said that if there were a proposed agreement it included matters that did not pertain to the employer-employee relationship. In my opinion, the question whether the July strike was carried out to advance or support claims in relation to a proposed agreement which could be certified is to be determined by reference primarily to the list of particulars which accompanied the Notice of Initiation of Bargaining Period on 29 April 2004, and the amended log of claims delivered on 10 May 2004. In my opinion, at that stage, the proposed agreement was inchoate. The union intended to pursue an agreement which would include matters of the kind referred to in its particulars and the amended log of claims subject, no doubt, to variation by reference to those matters which would be considered ambit claims. If any of them were not matters pertaining to the employer-employee relationship then that difficulty was overcome by the operation of s 170NHBA of the Workplace Relations Amendment (Agreement Validation) Act. That, of course, still leaves the question whether the condition imposed on protected action by s 170MP(1)(a) has been satisfied. 85 Although it was baldly submitted on behalf of Premier Coal that there had been no genuine attempt to reach agreement prior to the July strike action, it is clear that the discussions which had ensued in relation to the proposal for a certified agreement under the Workplace Relations Act subsumed, and were in a sense a continuation of, the extensive negotiations over many months that had already occurred in relation to the Enterprise Agreement proposal. The use of the draft Enterprise Agreement as the basis for the development of a certified agreement reinforces that proposition. Given the extent of the negotiations about the Enterprise Agreement and the involvement of basically the same personnel as were involved in the discussion of the certified agreement, I am satisfied that in those circumstances, on the balance of probabilities, the relevant officers of the AMWU (Cth) had, before the strike, genuinely tried to reach agreement with Premier Coal. That they had done so, in part, as officers of the AMWU-WA dealing with a proposed agreement under the State law, does not mean that the negotiations they undertook are to be disregarded for the purposes of the Commonwealth law. The alternative hypothesis to the proposition that the AMWU (Cth) had tried to reach agreement with Premier Coal is the rather improbable one that for some unspecified collateral purpose unconnected with trying to advance the long standing negotiations in so far as they related to the substantive terms and conditions to be included in any agreement, the AMWU (Cth) had organised a strike. 86 I am satisfied that the strike action in July was protected action. I am not prepared to make the declarations sought by Premier Coal in relation to that action. The Circumstances and Purposes of the October Strike 87 Premier Coal accepts that there was a proposed agreement in contemplation by the AWMU (Cth) at the time of the October strike. The terms of the October agreement were to be identified, according to Premier Coal, by reference to the drafts dated 30 and 31 August 2004 exhibited to Mr Warrand's affidavit (PW 20, PW 26 and PW 27). According to the submissions for Premier Coal however, the proposed agreement reflected in these drafts contains provisions not pertaining to the employer-employee relationship and for that reason is not a proposed agreement of the kind required by s 170NL(2)(e). 88 To the extent that the Premier Coal submissions depend upon its proposition that the existence of a certifiable draft agreement is a necessary condition of protected action under s 170NL, I reject it for the reasons already expressed. However, on the evidence in this case, the nature of the agreement contemplated by the AMWU (Cth) at the time of the October strike can be inferred from the particulars attached to its second Notice of Initiation of Bargaining Period which was delivered on 28 September 2004. Those particulars incorporated by reference all which had already been agreed. They picked up those elements of the drafts already prepared in so far as they reflected the progressive provisional agreement of the parties. 89 Agreement having been reached on those matters, it does not follow that the AMWU (Cth) took its strike action in October to support or advance claims for the inclusion of those agreed terms and conditions in the proposed agreement. Rather the evidence supports the inference, and I find, that the October strike was taken principally to support and advance the claims of the AMWU (Cth) in relation to the proposed rostering arrangements for maintenance workers. Pay levels were also unresolved at that time. These issues were mentioned by the AMWU (Cth) representatives at their meeting with the company representatives on 22 September. 90 I am satisfied that the strike was carried out to support or advance claims made in respect of the proposed agreement that clearly pertained to the employer-employee relationship, namely claims relating to rostering and pay levels. 91 For the reasons set out earlier in the general discussion of the requirements of protection action, the question remains whether the 'proposed agreement' in October would have included matters that did not pertain to the employer-employee relationship. A substantial part of the argument in this case involved the contention that the proposed agreement would have included matters not pertaining to the employment relationship. The fact that those matters were elements of the proposed agreement, reflected in the August drafts prepared by Premier Coal, was not in contention. What was in contention was whether they pertained to the employer-employee relationship. It is convenient to deal with each of them in sequence. 92 The process of characterisation should not require close parsing of the wording of the drafts. The 'proposed agreement' has not crystallised into a final draft. It can be assumed that, to the extent that detailed phrasing and redrafting might take a proposed clause out of the area of invalidity for the purposes of certification, it is likely to be addressed before final settlement of the terms. This means that characterisation is addressed principally to the subject matter of the provisions in issue rather than their precise terms. This is consistent with the form of the requirement for certification in s 170LI(1) in that the agreement is to be about 'matters' pertaining to the employer-employee relationship. I turn now to consideration of the matters in contention. The Char Plant 93 The draft certified agreement of 31 August 2004 set out in cl 3 the scope of the agreement and the parties bound by it. It contained an acknowledgement that Premier Coal might construct and operate a Char Plant on the mining lease and expand existing facilities. It provided for negotiation of a separate agreement applicable to employees in any pilot Char Plant and any Char Plant producing over 100,000 tonnes or more of char annually. In that respect a separate agreement would be negotiated applicable to employees at that place. 94 Premier Coal submitted that this claim did not apply to employees covered by the proposed agreement which covers employees identified in cl 3(1). 95 There is a real question whether the clause would have any legally enforceable operation. In any event, in my opinion, it deals with the limits of application of the agreement under current negotiation. The exclusion of certain classes of future employee and activities from the agreement is part of the definition of its scope. On that basis, the Char Plant provision is a matter which pertains to the employer-employee relationship by the global definition of its scope. Alternatively, I would regard it as ancillary to the substantive provisions of the agreement. Union Meetings - Clause 32 96 Clause 32 contains a number of subclauses which deal with various matters under the heading 'Union Meetings'. Matters it deals with are:

Wesfarmers Premier Coal Limited v The Automotive Food Metals

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Judgment (14 paragraphs)

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