National Union of Workers v Davids Distribution Pty Ltd [1998] FCA 1094

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY VG382 of 1998

BETWEEN: NATIONAL UNION OF WORKERS

Applicant

AND: DAVIDS DISTRIBUTION PTY LIMITED

Respondent

JUDGE: WILCOX J

DATE: 28 AUGUST 1998

PLACE: SYDNEY

EXTEMPORE REASONS FOR JUDGMENT WILCOX J: This is an urgent application to stay orders made two days ago by North J. North J had been seized, for a period of about two weeks, of a matter in which the applicant is National Union of Workers and the respondent is Davids Distribution Pty Limited. The application arose out of an industrial dispute between Davids and members of the applicant union employed by it. Apparently, the dispute concerned wages and working conditions. On 18 June, 1998 the union gave Davids what purported to be a notice, in accordance with s 170MO of the Workplace Relations Act 1996, concerning proposed protected action. The notice stated the action would commence on 25 June 1998. However, I gather no industrial action was commenced on that day or, indeed, until about 8 July. At that time the workers at two Sydney premises of Davids, or at least the majority of them, went on strike. Apparently, they formed a picket line at each of these premises. The picket line caused interference with vehicular access to, and egress from, the premises. Proceedings were taken in a number of jurisdictions, both in industrial tribunals and the Supreme Court of New South Wales, before the application to North J. His Honour had the matter before him on several occasions between 11 August and 26 August. During those hearings there was occasional reference to the termination of 52 employees, but it appears there was little evidence about the alleged terminations. The union contended the terminations were ineffective and void. However, it is not clear to me what exactly was meant by that statement. At the conclusion of a hearing on 26 August, North J accepted some undertakings given by counsel for the union and made the orders Davids now seeks to have stayed. I gather the undertakings resulted from comments made by his Honour on previous occasions indicating he would not be prepared to grant interim relief to the union except on the basis of undertakings designed to minimise the possibility of practical difficulties occurring if the people purportedly terminated returned to work and the company was restrained from terminating other people. The application made to me today is for a stay of North J's orders until Davids has an opportunity, in a Full Court, to seek leave to appeal against those orders. At the commencement of the hearing today, I indicated arrangements could be made for a Full Court to be constituted to hear the leave application on Wednesday week, 9 September. This happens to be the day upon which North J proposes to bring the matter back before him. It is unfortunate the dates clash; if the application for leave to appeal is to proceed, it obviously will take priority. The question for me is whether I should stay the orders until the Full Court can deal with the matter on 9 September. In the course of submissions, counsel referred to the principles that govern applications to stay orders made by single judges. The matter has been discussed in numerous authorities. It is sufficient for me to refer to the summary offered by Dawson J of the High Court of Australia in Commissioner of Taxation v Myer Emporium Limited (1986) 160 CLR 220 at 222-3. His Honour there said: "It is well established by authority that the discretion which it confers to order a stay of proceedings is only to be exercised where special circumstances exist which justify departure from the ordinary rule that a successful litigant is entitled to the fruits of his litigation pending the determination of any appeal. Special circumstances justifying a stay will exist where it is necessary to prevent the appeal, if successful, from being nugatory. Generally that will occur when, because of the respondent's financial state, there is no reasonable prospect of recovering moneys paid pursuant to the judgment at first instance. However, special circumstances are not limited to that situation and will, I think, exist where for whatever reason, there is a real risk that it will not be possible for a successful appellant to be restored substantially to his former position if the judgment against him is executed." In setting out that quotation I have eliminated the case references made by his Honour. Mr Buchanan QC, on behalf of Davids, suggests this approach is inappropriate in the case of an interlocutory order; at an interlocutory stage there are no final fruits of the litigation. I take that point, but, in such a case, the principle must be read as referring to interlocutory fruits. One party has succeeded in obtaining interlocutory relief; the question, then is whether there are special circumstances that justify depriving that party of the benefit of that relief pending determination of any appeal. In the present case there is no question of financial impecuniosity. However, as Dawson J pointed out, special circumstances are not limited to financial circumstances. The relevant question in this case is whether there is a real risk that it will not be possible to restore the present applicant substantially to its former position in the event of its success at the hearing before the Full Court. North J's reasons for making the orders of 26 August are not yet available. However, I have been shown the note of his Honour's reasons which was taken at the time of their oral exposition by counsel for the union. Counsel for Davids accept this note fairly reflects the substance of the reasons. It is apparent from the note that his Honour concerned himself almost exclusively with the balance of convenience. He said he thought the question he had to determine was finely balanced, but he came to the conclusion it was appropriate to make orders having the effect of obliging Davids to take back the people it had purported to dismiss and preventing it taking any action against other employees pending further consideration of the case. The orders that were made by North J were as follows: "1. Until 4:00pm on 9 September 1998, the Respondent, Davids Distribution Pty Ltd by itself, its servants and agents, treat all persons employed by it on 8 July 1998 as employees of the Respondent with continuity of service save and except for the purpose of payment of wages; and 2. Until 4:00pm on 9 September 1998, the Respondent, Davids Distribution Pty Ltd, by itself, its servants and agents, be restrained from taking all and any steps to give effect to any purported termination of employment effected on or after 8 July 1998 or to give effect to threat of termination made on or after 8 July 1998. 3. The further hearing of this application be adjourned to 10:15 am on 9 September 1998 to consider the extension of the above orders beyond 9 September 1998 and for directions. 4. Liberty to apply on very short notice." It will be noted his Honour gave liberty to apply on "very short notice". It seems he contemplated the possibility of variation of the orders if this became warranted. I will not set out in detail the undertakings offered by the union. They included an undertaking to pay to any party adversely affected by the orders such compensation as the Court thinks just. Perhaps more importantly, they included undertakings designed to ensure there would be no retaliation or victimisation. The union also undertook to enter into an agreed process of discussion with Davids concerning the circumstances of the purported termination of each of the 52 employees, with a view to narrowing the differences between the parties on those issues. It seems this undertaking arose from a concern by North J to have the parties try to reduce their area of disputation. Mr Buchanan complained that his Honour acted as if it was his task to settle the industrial dispute. I do not think this is an accurate description of North J's approach; he obviously had in mind the nature of the issues before him. However, to the extent that his Honour thought it would be useful for the parties to attempt to reduce the area of dispute, I can only say I think this was an appropriate course. Any judge, at an interlocutory stage of an action, ought to have in mind the question whether a particular order will tend to assist the parties to narrow their differences or the opposite. Particularly in an industrial context, any agreement between parties can only be applauded. The major issue that exercised his Honour's attention was addressed today. It can be disposed of shortly. I was asked to hold North J erred in deciding it was on balance convenient for the 52 men to be taken back into the work force pending the further hearing on 9 September. However, I think it would be inappropriate for me to substitute my judgment about that matter for that of North J. North J lived with this dispute over a period of about two weeks. He spent considerable time dealing with it. He had the benefit of evidence I have not seen, including video tapes that apparently showed events at the company's premises. In this situation, it would be wrong for me to act on my view about whether it was desirable or undesirable for the men to be required to be taken back on the job during the period of approximately two weeks that will elapse before the case can be considered by a Full Court. This is very much a matter for assessment by the primary judge. In my opinion, even a Full Court should be reluctant to interfere in a matter such as that; and then only after detailed consideration of the evidence and hearing full argument. A fortiori a single judge, on a hastily convened stay application, ought not to interfere with the view of the primary judge. The other matter that was raised goes beyond balance of convenience. It is an issue of legal principle. Mr Buchanan argued it was beyond the power of the Court to make an interlocutory order in respect of persons whose employment had already been terminated. He pointed out the claim made by the union in this depends upon two different provisions in the Act and dealt with each of them. The first set of provisions deals with protected action and, in particular, involves Division 10 of Part VIB of the Act, relating to enforcement of the provisions concerning protected action. Section 170NG says: "An eligible court may grant an injunction requiring a person not to contravene or to cease contravening a penalty provision." This Court is an "eligible court" within the meaning of that provision: see s 170NE. Section 170MU is a "penalty provision": see s 170ND. Section 170 MU provides that an employer must not dismiss an employee, injure an employee in his or her employment, alter the position of an employee to the employee's prejudice, or threaten to do any of those things, wholly or partly because the employee is proposing to engage, is engaging, or has engaged in protected action. The argument for the union, apparently, is that any dismissal or threatened dismissal by Davids of any employee involved in this industrial dispute contravenes s 170MU. I make no comment about whether or not that claim can be made good but, for present purposes, Mr Buchanan is prepared to assume this is the case which has to be met. It seems to be the position tentatively adopted by North J. The other relevant provision is Part XA of the Act which deals with action taken against a person because of membership of a union or action in an industrial dispute. Section 298U provides: "In respect of conduct in contravention of this Part, the Court may, if the Court considers it appropriate in all of the circumstances of the case make one or more of the following orders … (e) injunctions (including interim injunctions), and any other orders, that the Court thinks necessary to stop the conduct or remedy its effects." Mr Buchanan's argument is that an order that, in effect, reinstates an already dismissed employee cannot be regarded as an order necessary to stop the conduct or remedy its effects. I understand the force of the argument but I think it is preferable for me to refrain from expressing any view about it. Possibly the correct approach is to confine s 170NG to the granting of injunctions of a quia timet nature, requiring the respondent not to contravene a penalty provision or, if the contravention is continuing, to cease doing so. Possibly this is to be distinguished from a reinstatement order, s 298U(e) being construed so as not to include an injunction that has the effect of requiring reinstatement despite the inclusion in that paragraph of the words "or remedy its effect". Mr Buchanan's submissions on the extent of the Court's powers raise substantial questions which will, no doubt, be debated before the Full Court. However, I do not think I should enter into them today. There is a prior problem in regard to any intervention by me in respect of the 52 employees: the lack of clarity in the evidence concerning their termination. As I have indicated, before North J there was reference to purported terminations. The union made clear it did not accept that the 52 people had been effectively terminated, whether or not any termination contravened the Act. I sought assistance about the matter from Mr Buchanan. He provided me with an affidavit sworn by Raymond Richards, the State Manager - Distribution of Davids. Mr Richards gave information about letters sent to people who had allegedly been involved in picketing activities and then he made the statement, in respect of each of several batches of those people, that, in the absence of any satisfactory explanation, they "have now had their employment terminated". Evidence in that form is inadmissible. Mr Richards gave no information as to the manner of the termination, so as to enable the Court to determine whether the terminations are complete, whether or not termination would be a breach of the Act. The reason, I think, that the situation was not clarified before his Honour was that this was not then a significant issue. As I have said, at the most recent hearing, the argument was confined to matters of convenience. If I was able to reach a clear view that the terminations of the 52 employees, or some of them, had in fact been effectively completed before North J made his orders on 26 August, I would need to consider the legal problems raised by Mr Buchanan. If I reached the view the relevant section did not permit an order which, in effect, required reinstatement, this might be a proper basis upon which to grant a stay; on that basis, his Honour would have fallen into an error of legal principle. However, the factual situation has been left so obscure it is inappropriate to take that course. This is perhaps unfortunate, but the reason is the matter was not adequately addressed before North J. The company may wish to return to his Honour with proper evidence and debate this matter in the context of an application for variation of his orders. That course seems open to it. I do not feel I have the factual material needed to justify my intervention. I refuse the application for a stay. I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox