FEDERAL COURT OF AUSTRALIA Australian Services Union v Electrix Pty Ltd [1999] FCA 211 INDUSTRIAL LAW – interlocutory relief – serious issue to be tried – duress – whether respondent has contravened s170WG(1) of the Workplace Relations Act 1996 (Cth) by applying duress to meter readers it intends to employ on the condition that they sign an Australian Workplace Agreement – whether regard ought to be had to extrinsic material in construing that section – balance of convenience. Acts Interpretation Act 1901 (Cth) s15 AB Workplace Relations Act 1996 (Cth) ss170VA, 170VB, 170VK, 170VZ, 170WG Workplace Relations and Other Legislation Amendment Bill 1996 (Cth) Equiticorp Financial Services Ltd (NSW) v Equiticorp Financial Services Ltd (NZ) (1992) 29 NSWLR 260 applied Newcastle City Council v GIO General Limited (1997) 191 CLR 85 followed Health Services Union of Australia v North Eastern Health Care Network (1997) 79 FCR 43 considered Communication, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and Ors v Citipower Pty, Marshall J, 9 July 1997, unreported, applied AUSTRALIAN SERVICES UNION v ELECTRIX PTY LTD (ACN 06-7232393) V 85 OF 1999 MARSHALL J MELBOURNE 11 MARCH 1999 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 85 OF 1999 BETWEEN: AUSTRALIAN SERVICES UNION Applicant AND: ELECTRIX PTY LTD (ACN 06-7232393) Respondent JUDGE: MARSHALL J DATE OF ORDER: 3 MARCH 1999 WHERE MADE: SYDNEY Upon the applicant by its counsel undertaking to pay to any party adversely affected by these orders such compensation (if any) as the Court thinks just, in such manner as the Court directs: THE COURT ORDERS THAT: 1. Until the hearing and determination of the proceeding or further order the respondent by itself, its servants or agents be restrained from requiring that any person who will be an employee of the respondent agree with the respondent to make an Australian Workplace Agreement as a condition of such employment. 2. The applicant to file and serve any affidavits on which it intends to rely at the trial and its contentions of fact and law limited to the question of liability by 4.00 pm, 11 March 1999. 3. The respondent to file and serve any affidavits on which it intends to rely at the trial and its contentions of fact and law limited to the question of liability by 4.00 pm, 18 March 1999. 4. The applicant to file and serve any affidavits in reply and any reply to the contentions of fact and law of the respondent by 4.00 pm, 25 March 1999. 5. The trial be conducted by affidavit. 6. The trial is fixed for not before 10.30 am, 1 April 1999, 10.15 am, 7 April 1999 and 10.15 am, 14 April 1999. 7. Liberty to apply on the giving of not less than 24 hours written notice to the other party. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 85 OF 1999 BETWEEN: AUSTRALIAN SERVICES UNION Applicant AND: ELECTRIX PTY LTD (ACN 06-7232393) Respondent JUDGE: MARSHALL J DATE: 11 MARCH 1999 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 On 3 March 1999, after hearing submissions from Mr Staindl, counsel for the applicant, the Australian Services Union ("ASU") and from Mr Wood, counsel for the respondent, Electrix Pty Ltd (ACN 06-7232393) ("Electrix"), the Court made an order ("the order") which includes the following material terms: "Upon the applicant by its counsel undertaking to pay to any party adversely affected by these orders such compensation (if any) as the Court thinks just, in such manner as the Court directs: 1. Until the hearing and determination of the application or further order the respondent by itself, its servants or agents be restrained from requiring that any person who will be an employee of the respondent agree with the respondent to make an Australian Workplace Agreement as a condition of such employment…." 2 The Court then announced that it would publish its reasons for making the order as soon as reasonably practicable. What follows are my reasons for making the order. Background 3 The ASU is an organisation of employees registered pursuant to the Workplace Relations Act 1996 (Cth) ("the Act"). The ASU has, as members, persons employed as meter readers in the electrical power industry in Victoria. Prior to December 1997 the meter readers were employed by Powercor Australia ("Powercor"), a successor to the former State Electricity Commission of Victoria. In December 1997 Powercor contracted out its substantial meter reading function to Victorian Meter Management Pty Ltd ("VMM"). 4 In February 1998 the Australian Industrial Relations Commission certified an agreement between VMM and the ASU in accordance with s170LT of the Act ("the certified agreement"). In October 1998 VMM was placed in receivership. Shortly thereafter Powercor sought a replacement contractor for VMM. In January 1999 Powercor announced that Electrix was the preferred entity to provide services formerly provided by VMM. 5 On 17 February 1999, Electrix invited persons employed by VMM as meter readers to register an expression of interest for the position of meter reader with Electrix. A condition of the proposed employment was that meter readers were to sign a document entitled "The Electrix Meter Reading Australian Workplace Agreement" ("the AWA"). 6 The ASU has been appointed by a number of meter readers as their bargaining agent pursuant to s170VK of the Act. Mr Michael Rizzo, the Assistant Branch Secretary of the Victorian Branch of the ASU is the officer with the relevant responsibility pursuant to such appointments under s170VK of the Act. 7 Mr Ian McLeod is the manager of Electrix. Mr Rizzo and Mr McLeod have had discussions concerning the proposed regulations of the terms and conditions of employment of meter readers to be employed by Electrix. In the course of those discussions Mr McLeod said words to the effect that "if people don't sign an AWA they won't get a job". 8 The position of Electrix is that it does not wish to employ meter readers on the terms and conditions set out in the certified agreement. In its view it is not commercially viable for it to employ meter readers under the terms of the certified agreement. It sees the AWA as a vehicle to cut the labor costs it may otherwise be faced with if it has to apply the certified agreement. The Legislative Context 9 Section 170WG(1) of the Act provides that: "A person must not apply duress to an employer or employee in connection with an AWA or ancillary document." 10 Section 170VB(2) of the Act states that: "In relation to a proposed AWA or ancillary document, a reference to the employer or the employee is a reference to the person who will be the employer or employee when the AWA or ancillary document starts to operate." 11 Section 170VZ of the Act provides that: "An eligible court may grant an injunction requiring a person not to contravene, or to cease contravening, this Part." The definition of "eligible court" is provided by s170VA of the Act and includes this court. Serious Issue to be tried 12 In my opinion there is a serious issue to be tried on the question of whether Electrix has contravened s170WG(1) of the Act by applying duress to meter readers whom Electrix intends to employ on the condition that the meter readers sign the AWA. 13 More specifically, it is my view that the serious issue to be tried relates to whether compulsion or absence of choice have been thrust upon both the meter readers and Mr Rizzo, in his capacity as bargaining agent for those who have so appointed the ASU, by Electrix. See Equiticorp Financial Services Ltd (NSW) v Equiticorp Financial Services Ltd (NZ) (1992) 29 NSWLR 260, 296-297 per Giles J. 14 I reject Mr Wood's submission that the evidence discloses no unconscionable conduct on the part of Electrix. 15 It's also my view that the conduct of Mr McLeod, in effectively saying to meter readers "it's the AWA or your job", is unconscionable conduct which no employee in a humane, tolerant and egalitarian society should have to suffer. As the evidence currently stands, when considered from the perspective of a serious issue to be tried, Mr McLeod's act of informing Mr Rizzo, the bargaining agent for a number of meter readers, was unconscionable conduct. Similar observations may be made about the context of the letters sent by Electrix to meter readers on 17 February 1999. 16 I hold the view that there is a serious issue to be tried in this application notwithstanding the following statement in the explanatory memorandum which accompanied the Workplace Relations and Other Legislation Amendment Bill 1996 (Cth), ("the Bill") which provided that: "New sub section 170WG(1) provides that a person must not apply duress to an employee or employer in connection with an AWA or an ancillary document. This would not prevent an employer from offering employment on the basis that the employee enter into an AWA…" (emphasis supplied) 17 Mr Staindl submitted that s170WG(1) of the Act is clear in its terms and that in accordance with s15AB of the Acts Interpretation Act 1901 (Cth), the Court should not have regard to what is contained in the extrinsic material constituted by the explanatory memorandum. He also submitted that even if the Court were to have regard to such extrinsic material the explanatory memorandum does not support the conduct of Electrix in that it specifically refers to a situation where an employer offers employment on the basis that the employee enter into an AWA. Mr Staindl emphasised a critical distinction with the present situation where the employment was offered on the basis of the employee entering into a particular AWA rather than an AWA which would be subject to negotiation between the parties. 18 In any event I do not believe that the gloss put on s170WG(1) of the Act by the explanatory memorandum is, in the context of considering if there is a serious issue to be tried, such an overwhelming factor destructive of the prospects of success of the application. An explanatory memorandum is not a statute. It is impermissible to attempt to use it to contradict what otherwise appears to be the plain and unambiguous intention of the Act. 19 As McHugh J said in Newcastle City Council v GIO General Limited (1997) 191 CLR 85, 113: "Extrinsic material cannot be used to construe a legislative provision unless the construction of the provision suggested by that material is one that is "reasonably open". Even if extrinsic material convincingly indicates the evil at which a section was aimed, it does not follow that the language of the section will always permit a construction that will remedy that evil. If the legislature uses language which covers only one state of affairs, a court cannot legitimately construe the words of the section in a tortured and unrealistic manner to cover another set of circumstances. As Brennan CJ and I said in IW v City of Perth, even when a court adopts a purposive construction to remedial legislation it "is not at liberty to give it a construction that is unreasonable or unnatural". 20 As Mr Staindl submitted it would be an absurd result if an employer was free to apply duress to a prospective employee in connection with an AWA but not free to do so once that employee was actually employed by the employer and some replacement AWA or ancillary document was being offered to the employee. Section 170WG(1) of the Act, at least at this stage of the proceeding, does not seem to me to be accurately summarised in the explanatory memorandum which accompanied the Bill. Balance of Convenience 21 A large number of the meter readers reside in country Victoria. It was common ground before me that the employment prospects of many meter readers would be bleak if they were not able to continue in their current occupation. It follows that meter readers are particularly susceptible to pressure which may be applied on them by a prospective employer so that they can follow their craft. 22 Although I am not required to determine the question in these proceedings there is a respectable argument to be advanced on behalf of meter readers, by the ASU, that the certified agreement would bind any successor to VMM. See Health Services Union of Australia v North Eastern Health Care Network (1997) 79 FCR 43. 23 In those circumstances what meter readers would be confronted with, in the absence of injunctive relief, is a situation where Electrix is able to unilaterally vary their entitlements on a "take it or leave it" basis. Without injunctive relief meter readers would essentially be left with the choice between reduced entitlements or the economic scrap heap of unemployment. These workers have specialised skills which are incapable of being readily utilised in other gainful employment. 24 In that context I am unable to accept Mr Wood's submission that the evidence discloses that the meter readers have not been hurt. In any event in the absence of injunctive relief hurt to them is inevitable. I also reject Mr Wood's submission that a relevant factor to be weighed in considering the balance of convenience is that there is no guarantee that any contractor other than Electrix would give the meter readers preference over people not currently employed as meter readers. Practically, it would be difficult for any other contractor in the short term to train a wholly new workforce as meter readers. It is far more likely that as a matter of commercial reality that those currently experienced in meter reading would be favoured to be employed by whoever Powercor chooses to perform work previously carried out by VMM. 25 A further submission of Mr Wood was that there is no evidence from actual meter readers, as distinct from Mr Rizzo, rejecting any disadvantage suffered by them. I reject that submission. Mr Rizzo, as bargaining agent for the ASU's members, negotiates for them in respect of the AWA. The rebuff to him by Electrix is a rebuff to those whom he represents. In any event in the orders I made on 3 March 1999, for the further conduct of the proceeding, I reserved liberty to apply on 24 hours written notice. The concerns of any particular meter readers, insofar as they are not represented by ASU or Mr Rizzo, may be addressed by Electrix pursuant to such liberty to apply. Further, I have expedited the progress of this matter leading to an early trial of the proceeding, commencing on 1 April 1999. 26 Finally, Mr Wood submitted that ultimately damages would be an adequate remedy. Upon the assumption that compensation would be payable to meter readers if the application succeeds, I am of the view that such compensation cannot wholly compensate for the stigma of unemployment especially for that large number of meter readers who reside in depressed areas of country Victoria. See also Communication, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and Ors v Citipower Pty (Marshall J, 9 July 1997, unreported) concerning the inability of mere dollars and cents to compensate for one's loss of livelihood. 27 In my opinion the balance of convenience strongly favours the granting of interlocutory relief for the reasons outlined above. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. Associate: Dated: 11 March 1999 Counsel for the Applicant: Mr D Staindl Solicitor for the Applicant: Ryan Carlisle Thomas Counsel for the Respondent: Mr S Wood Solicitor for the Respondent: Clayton Utz Date of Hearing: 3 March 1999 Date of Order: 3 March 1999 Publication of Reasons: 11 March 1999