FEDERAL COURT OF AUSTRALIA Australian Workers' Union v BHP Iron Ore Pty Ltd FCA [2000] 39 INDUSTRIAL LAW – injury of employees in their employment – alteration of positions of employees to their prejudice – whether serious question that injury or alteration occurs when terms and conditions of employment of some employees improved while others remain static – whether serious question to be tried of actual discrimination – prohibited reasons – operation of statutory presumption in interlocutory application – inducement to employee to stop being member of industrial association – entering into individual workplace agreements with employees – whether intention an essential element of inducement – whether serious question to be tried of intention to induce employees to stop being members of unions – contract of employment – whether term of award arguably express term of contract – whether contractual obligation on employer to refrain from entering into contract of employment with any employee inconsistent with award – extent to which Western Australian workplace agreements override awards – whether workplace agreements override contractual obligations of employer to other employees. CONTRACTS – terms – incorporation by reference of terms of industrial award into contract of employment – term preventing employer from entering into contract of employment inconsistent with award with any employee – whether breach of contract for employer to enter into workplace agreements inconsistent with award with some employees. INJUNCTIONS – exercise of discretion – industrial dispute. PRACTICE AND PROCEDURE – transfer of proceeding from proper place – relevance of possible place or places of trial. WORDS AND PHRASES – "injure an employee in his or her employment" – "alter the position of an employee to the employee's prejudice" – "whether by threats or promises or otherwise" – "induce". Workplace Relations Act 1996 (Cth) ss 298B, 298K, 298L, 298M, 298V Evidence Act 1995 (Cth) ss 75, 78, 80 Federal Court Rules O 1 r 4, O 10 r 1(2)(f) Industrial Relations Act 1979 (WA) Workplace Agreements Act 1993 (WA) s 6 Health Services Union of Australia v Tasmania (1996) 73 IR 140 followed Maritime Union of Australia v Geraldton Port Authority [1999] FCA 899 considered United Firefighters Union of Australia v Country Fire Authority (Industrial Relations Court of Australia, North J, 24 December 1996, unreported) followed Independent Education Union of Australia v Canonical Administrators, Barkly Street, Bendigo (1998) 157 ALR 531 considered Davids Distribution Pty Ltd v National Union of Workers [1999] FCA 1108 followed Trade Practices Commission v Mobil Oil Australia Ltd (1984) 3 FCR 168 followed Australian Paper Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia (1998) 81 IR 15 discussed National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155 followed AUSTRALIAN WORKERS' UNION & ORS v BHP IRON ORE PTY LTD VG 24 OF 2000 GRAY J 31 JANUARY 2000 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 24 OF 2000 BETWEEN: AUSTRALIAN WORKERS' UNION FIRST APPLICANT CONSTRUCTION, FORESTRY, MINING & ENERGY UNION SECOND APPLICANT AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING & KINDRED INDUSTRIES UNION THIRD APPLICANT COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING & ALLIED SERVICES UNION OF AUSTRALIA FOURTH APPLICANT TRANSPORT WORKERS' UNION OF AUSTRALIA FIFTH APPLICANT DOUGLAS STEAD SIXTH APPLICANT ROSS KOMEROA SEVENETH APPLICANT IAN BURTENSHAW EIGHTH APPLICANT PHILLIP ROONEY NINTH APPLICANT ROSS BEGGS TENTH APPLICANT AND: BHP IRON ORE PTY LTD RESPONDENT JUDGE: GRAY J DATE OF ORDER: 31 JANUARY 2000 WHERE MADE: MELBOURNE THE COURT NOTES THAT the respondent by its counsel undertakes to the Court: (a) to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of this interlocutory order or any continuation (with or without variation) thereof; and (b) to pay the compensation referred to in (a) to the person there referred to. THE COURTORDERS THAT: 1. Until the hearing and determination of the proceeding, or further order, the respondent, by itself, its servants or agents, be restrained from offering, entering into, or taking any step to make, formalise or register a workplace agreement made pursuant to the Workplace Agreements Act 1993 (WA) or any contract of employment conditional upon the making of a workplace agreement with any of its employees whose employment is regulated by: (a) the Iron Ore Production and Processing (Mt. Newman Mining Company Pty Limited) Award No. A 29 of 1984, sometimes called the Iron Ore Production and Processing (BHP Iron Ore Pty Ltd) Award No. A 29 of 1984, an award of the Western Australian Industrial Relations Commission; (b) the BHP Iron Ore Enterprise Bargaining Agreement 1993, registered with the Western Australian Industrial Relations Commission in application no C314 of 1993 on 14 July 1993; (c) the BHP Iron Ore Pty Ltd – BHP Iron (Goldsworthy) Pty Ltd Enterprise Bargaining Agreement 1995, registered with the Western Australian Industrial Relations Commission in application no C339 of 1995 on 24 November 1995; (d) the BHP Iron Ore Enterprise Bargaining Agreement 1997, registered with the Western Australian Industrial Relations Commission in application no AG333 of 1997 on 13 January 1998. 2. The motion by the respondent for an order that the proceeding be transferred to the Western Australia District Registry of the Court be dismissed. 3. The proceeding be listed for directions at 9.30 am on 2 February 2000 in Melbourne. 4. The costs of all parties be reserved. 5. Liberty be reserved to any party to apply on forty-eight hours' notice in writing. 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 VG 24 OF 2000 BETWEEN: AUSTRALIAN WORKERS' UNION FIRST APPLICANT CONSTRUCTION, FORESTRY, MINING & ENERGY UNION SECOND APPLICANT AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING & KINDRED INDUSTRIES UNION THIRD APPLICANT COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING & ALLIED SERVICES UNION FOURTH APPLICANT TRANSPORT WORKERS' UNION OF AUSTRALIA FIFTH APPLICANT DOUGLAS STEAD SIXTH APPLICANT ROSS KOMEROA SEVENETH APPLICANT IAN BURTENSHAW EIGHTH APPLICANT PHILLIP ROONEY NINTH APPLICANT ROSS BEGGS TENTH APPLICANT AND: BHP IRON ORE PTY LTD RESPONDENT JUDGE: GRAY J DATE: 31 JANUARY 2000 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 This application for an interlocutory injunction was made as a matter of urgency. It was filed in the Victoria District Registry of the Court on 21 January 2000 and heard on 27 January 2000. Counsel for all parties accepted that I should determine the application by considering whether the applicants raise a serious question to be tried that the respondent has engaged in, and is likely to continue to engage in, conduct that is unlawful and, if so, whether the balance of convenience as between the applicants and the respondent favours the granting of an interlocutory injunction. Accordingly, the findings of fact which are set out in these reasons for judgment are made on the basis of evidence given on affidavit, untested by cross-examination, and prepared in a hurry. Those findings are not to be considered in the same light as findings of fact which might be made after a full trial of the issues. Background facts 2 The respondent is a corporation and is a wholly owned subsidiary of the Broken Hill Proprietary Company Ltd, which is also a corporation. The respondent carries out iron ore production and processing in the Pilbara region in Western Australia. Its operations include quarrying, mining, crushing, treating, storing, transporting, loading and unloading of iron ore. Its mine is located at Newman. Ore is transported by rail approximately 450 kilometres from the mine to Nelson Point and Finucane Island, at Port Hedland, where processing and ship loading facilities are located. The respondent owns the railway and the rolling stock and operates the railway as a private concern, for the purposes of transporting the ore. 3 Traditionally, management and employees of the respondent have recognised a distinction between "staff" employees and "award" employees. Award employees were those who, prior to November 1999, worked on terms and conditions prescribed principally by the award and the other collective agreements to which I refer below. Staff employees were foremen, supervisors, superintendents, departmental managers and other managers, whose terms and conditions of employment were governed principally by separate contracts of employment, each made between one of those employees and the respondent. Prior to November 1999, the respondent employed approximately 1,057 award employees. Approximately 450 of them were at Newman, approximately 131 at Finucane Island and approximately 476 at Nelson Point. 4 The terms and conditions on which award employees are employed are governed by an award and a series of collective agreements. The award was called the Iron Ore Production and Processing (Mt. Newman Mining Co Pty Limited) Award No. A 29 of 1984, although in some later references to it the name of the respondent is inserted in the brackets in lieu of the original name. It is an award made, and amended from time to time, by the Western Australian Industrial Relations Commission, pursuant to the Industrial Relations Act 1979 (WA). I refer to it as "the award". Changes in the industrial relations regime in Western Australia in the 1990s led to the formation of a single bargaining unit, with representatives of all of the trade unions whose members included award employees of the respondent. The single bargaining unit negotiated a series of collective agreements with the respondent, entitled the BHP Iron Ore Enterprise Bargaining Agreement 1993 (registered with the Western Australian Industrial Relations Commission in application no C314 of 1993 on 14 July 1993), the BHP Iron Ore Pty Ltd - BHP Iron (Goldsworthy) Pty Ltd Enterprise Bargaining Agreement 1995 (registered with the Western Australian Industrial Relations Commission in application no C339 of 1995 on 24 November 1995), and the BHP Iron Ore Enterprise Bargaining Agreement 1997 (registered with the Western Australian Industrial Relations Commission in application no AG333 of 1997 on 13 January 1998). These agreements are referred to as "the 1993 EBA", "the 1995 EBA" and "the 1997 EBA" respectively, and generically as "the EBAs". The 1995 and 1997 EBAs provide that the earlier EBA or EBAs continue to operate, except to the extent of any inconsistency. In addition, there is an agreement called the Industrial Relations Agreement, made between the respondent and trade unions whose membership included award employees of the respondent. The Industrial Relations Agreement has been amended from time to time as a result of negotiation between the respondent and the trade unions parties to it. 5 The trade unions parties to these various agreements were all registered pursuant to the Industrial Relations Act 1979 (WA). They are: the Australian Workers' Union, West Australian Branch, Industrial Union of Workers; the Construction, Forestry, Mining, Energy, Timberyards, Sawmills and Woodworkers Union Western Australian Branch; the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union of Workers, Western Australian Branch; the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Workers Union of Australia, WA Branch; and the Transport Workers' Union of Australia, Industrial Union of Workers, Western Australian Branch. In these reasons for judgment, I refer to these trade unions generically as "the state-registered trade unions". As the names of the state-registered trade unions suggest, each has an affiliation to or a connection with an organisation of employees registered pursuant to the Workplace Relations Act 1996 (Cth). Those organisations are: the Australian Workers' Union; the Construction, Forestry, Mining & Energy Union; the Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union; the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union; and the Transport Workers' Union of Australia respectively. Those five organisations of employees are the first five applicants in this proceeding. The remaining five applicants are award employees of the respondent. Each of them is a member of one of the first five applicants. The relief sought 6 In the application filed, the applicants seek a number of orders pursuant to the Workplace Relations Act 1996 (Cth). They include orders pursuant to s 298U for the imposition of penalties, the payment of compensation, injunctions and orders to remedy the effects of conduct, in respect of alleged contraventions of s 298K. They include similar orders pursuant to s 298U in respect of alleged contraventions of s 298M. They include a declaration that certain agreements entered into between the respondent and its employees, including workplace agreements made under the Workplace Agreements Act 1993 (WA) are void to the extent that they require or permit the loss of any entitlement an employee would otherwise have had under the award, the EBAs and the Industrial Relations Agreement. They include the imposition of penalties and injunctions relating to alleged contraventions of s 170MU and declarations that industrial action taken against the respondent is protected action pursuant to s 170MT. In addition to remedies sought under the Workplace Relations Act 1996 (Cth), the application seeks damages for breach of contract and injunctions to restrain the respondent from further breaches of contracts between it and some of its employees. Interlocutory relief of a number of kinds is sought in the application filed. At the hearing of the interlocutory application, counsel for the applicants confined the application for interlocutory relief to an application for an injunction, pending the hearing and determination of the proceeding or further order, restraining the respondent from offering, entering into, or taking any step to make, formalise or register a workplace agreement made pursuant to the Workplace Agreements Act 1993 (WA) or any contract of employment conditional upon the making of such an agreement, with any of its employees whose employment is regulated by the award and the EBAs. Statutory provisions 7 Relevant to the application for interlocutory relief are the following provisions of the Workplace Relations Act 1996 (Cth): 298K(1) An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following: (a)… (b) injure an employee in his or her employment; (c) alter the position of an employee to the employee's prejudice; …. 298L(1) Conduct referred to in subsection 298K(1)…is for a prohibited reason if it is carried out because the employee…: (a) is, has been, proposes to become or has at any time proposed to become an officer, delegate or member of an industrial association; or … (h) is entitled to the benefit of an industrial instrument or an order of an industrial body; or … (l) in the case of an employee, or an independent contractor, who is a member of an industrial association that is seeking better industrial conditions - is dissatisfied with his or her conditions; …. 298M An employer, or a person who has engaged an independent contractor, must not (whether by threats or promises or otherwise) induce an employee, or the independent contractor, (as the case requires) to stop being an officer or member of an industrial association. 298V If: (a) in an application under this Division relating to a person's or an industrial association's conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or with a particular intent; and (b) for the person or industrial association to carry out the conduct for that reason or with that intent would constitute a contravention of this Part; it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reason or with that intent, unless the person or industrial association proves otherwise. 8 In s 298B, the term "industrial association" is defined in terms broad enough to include the first five applicants and the state-registered trade unions. The term "industrial instrument" is defined in terms broad enough to cover the award, the EBAs and the Industrial Relations Agreement. The applicants' case 9 The case put on behalf of the applicants relies on three separate grounds. The first ground is that the respondent has embarked on a course of conduct by which it has injured some of its award employees in their employment, or altered their positions to their prejudice, for prohibited reasons or reasons which include prohibited reasons, and proposes to continue that course of conduct. The course of conduct is said to include four elements. The first element is entering into individual workplace agreements with some of the respondent's award employees, and registering those agreements pursuant to the Workplace Agreements Act 1993 (WA), thereby treating those employees as staff employees. The second element is the respondent's refusal to engage in collective bargaining with respect to the terms and conditions of employment of award employees. The third element is the adoption of a scheme for voluntary redundancy of employees. The fourth element is overt discrimination against some award employees who have not accepted the offers of workplace agreements. Three prohibited reasons are alleged. The first prohibited reason is that award employees are members, or in some cases officers or delegates, of the state-registered trade unions or the first five applicants. The second prohibited reason is that award employees are entitled to the benefit of industrial instruments in the form of the award and the EBAs. The third prohibited reason is that the award employees, being members of industrial associations that are seeking better industrial conditions, are dissatisfied with their conditions. 10 The second ground of the applicants' case is that, by making with some award employees individual workplace agreements, which are then registered pursuant to the Workplace Agreements Act 1993 (WA), the respondent has induced those employees to stop being members of the state-registered trade unions or the first five applicants. The third ground of the applicants' case alleges that, by entering into individual workplace agreements with some award employees, and having those workplace agreements registered, the respondent has committed breaches of the contracts of employment of other award employees. The material before the Court 11 In order to understand the applicants' case, it is necessary to summarise the facts. The following summary is taken from the evidence in the affidavits filed on behalf of the applicants and the respondent and the documents exhibited to those affidavits. Counsel for the respondent objected to a number of passages in the affidavits filed on behalf of the applicants and, in two cases, to the entire affidavits. The objections were principally that the material was irrelevant, was hearsay, was inadmissible opinion evidence, was a conclusion drawn by the deponent concerned, or was mere "assertion". I do not propose to extend these reasons for judgment unduly by ruling upon each individual objection. Where I have relied upon evidence in these reasons for judgment, it is clear that I regard it as relevant to the issues raised. The objections based on the hearsay rule cannot succeed in the face of s 75 of the Evidence Act 1995 (Cth), which provides that, in an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source. The objections based on the opinion rule are deprived of much of their force by s 78 of the same Act, which abolishes the rule in respect of evidence of opinion based on what a person saw, heard or otherwise perceived about a matter or event where the evidence of opinion is necessary to obtain an adequate account or understanding of the person's perception of the matter or event, and by s 80 of the same Act, which renders opinion evidence admissible as to facts in issue, ultimate issues and matters of common knowledge. In other cases, opinions given in the affidavits were clearly based on the requisite experience or academic expertise. The provisions of ss 78 and 80 of the Evidence Act 1995 (Cth) are also relevant to the objections that evidence was given in the form of conclusions. I have difficulty in understanding the objection based on the proposition that evidence was mere "assertion". I have based the findings of fact in these reasons for judgment on statements of fact in the affidavits and material in the exhibits to the affidavits. Where I have found passages in the affidavits that are merely argumentative, I have not relied on them. I have assessed the weight of various items of evidence in coming to the conclusions that I have reached. In particular, where hearsay evidence is not first hand, or where the source of hearsay evidence is not stated in detail (thereby diminishing the opportunity the respondent has to contradict it), I have considered the weight properly to be attributed to it. I have also borne in mind that the respondent was placed in the position of having to respond to the applicants' affidavits in a very short time and has not necessarily made a full response. It must be remembered, however, that I am considering whether a serious question to be tried is raised on the material. A sworn refutation by the respondent of factual allegations in an affidavit filed on behalf of the applicants does not eliminate that allegation from consideration. It merely means that the allegation is contentious, and is a factor to be borne in mind when considering whether a serious question to be tried has been raised. The history of individual contracts at Hamersley and Robe River 12 Besides the respondent, two other large corporations are engaged in mining, transport, processing and shipping of iron ore in the Pilbara region. They are Hamersley Iron Pty Ltd ("Hamersley") and Robe River Iron Associates Pty Ltd ("Robe River"). Both are competitors of the respondent. Prior to 1993, each had significant numbers of award employees. In that year, each began offering employment on "staff" contracts to its award employees. In a relatively short time, the overwhelming majority of award employees of each accepted the offers and took up "staff" contracts. Only 1 or 2 per cent of employees of Hamersley and Robe River remain award employees. Prior to the occurrence of these events, most of the award employees of Hamersley and Robe River were members of trade unions. The rate of union membership in each case has declined following the acceptance of "staff" contracts. Union membership in each case is now very low, with the result that unions find it impossible to organise collective action by employees of Hamersley or Robe River or to represent individual members in relation to grievances with management. At first, the "staff" contracts offered by Hamersley and Robe River delivered significant monetary benefits to those accepting them. New employees engaged by Hamersley and Robe River have not been given any option other than individual "staff" contracts. This factor, coupled with a relatively high turnover of labour in a remote region such as the Pilbara, enabled Hamersley and Robe River over time to reduce the benefits to their employees, and thereby to cut their labour costs. John Mossenton, an organiser for the third applicant, with responsibility for the respondent, Hamersley and Robe River, said in his affidavit that those joining the workforces of Hamersley and Robe River now would generally be paid less than they would have received under 1993 award rates, having regard to the hours they work. Redundancy offers by the respondent 13 From about March 1999, the respondent began reducing its workforce by offering redundancy packages to employees. The packages were based to a significant extent on years of service of employees with the respondent. A number of award employees have accepted redundancy packages. The effect of this has been to reduce substantially the number of union convenors, deputy convenors and shop stewards, as well as the number of active union members. This is a consequence of the fact that active union members, and those holding official union positions as convenors, deputy convenors and shop stewards, tended to be the longer-serving of the award employees, to whom the redundancy packages were more attractive, because the amounts offered were based on years of service. 14 Counsel for the applicants attempted to rely on the effect of the redundancy process, in conjunction with the other elements to which I have referred, as evidence of the course of conduct by the respondent of which the applicants complain. For the purposes of determining this interlocutory application, I have disregarded the redundancy scheme. There is nothing to indicate that the respondent did not genuinely desire a reduction in the size of its workforce. No criticism can be made of a redundancy scheme offering benefits to employees who choose to leave their employment on the basis that longer-serving employees receive greater benefits. Such schemes are common. Indeed, if the respondent had attempted to offer a scheme tending to be less attractive to active union members and those holding official union positions, it would very likely have fallen foul of s 298K. Any effect of the scheme on union membership was incidental. The redundancy scheme is unlikely to be regarded as an element of illegitimate conduct by the respondent. Collective bargaining in 1999 15 Prior to 1999, the Industrial Relations Agreement between the respondent and the state-registered trade unions was last amended in 1997. In early 1999, the respondent advised the state-registered trade unions of its desire to negotiate changes to that agreement. Some of these changes related to reduction in the types and frequency of union meetings for which employees would be paid during their attendance, and removal of the rights of union convenors, deputy convenors and shop stewards to time off to deal with their representative roles in relation to grievances and disciplinary matters, meetings with the respondent's representatives and attendance to internal union administrative affairs. 16 From about March 1999, the single bargaining unit began to take steps towards negotiating a new collective agreement with the respondent. A list of claims was prepared, following the expressions of union members at various meetings as to matters about which they were dissatisfied. The list of claims covered wages, allowances, qualifications for allowances, superannuation arrangements, and the classification structure for employees. Negotiations took place, both in relation to these claims and the changes sought by the respondent to the Industrial Relations Agreement. The respondent refused to offer any additional money to employees as part of the negotiations. By letter dated 19 April 1999, the respondent gave notice to the state-registered trade unions that it proposed to withdraw from the Industrial Relations Agreement from 1 June 1999. The respondent was entitled to withdraw from that agreement by notice. The giving of notice prompted further negotiations and the Industrial Relations Agreement was revised. Merger negotiations with Hamersley 17 In the middle of 1999, the respondent entered into negotiations with Hamersley, with a view to the merger of their operations. The discussions progressed as far as the respondent and Hamersley conducting "due diligence" examinations of each other's operations. In this way, the respondent gained access to information about the labour costs of Hamersley, which are lower than those of the respondent. The merger did not occur. Review of the respondent's operations 18 According to the affidavit of Jeffrey Malcolm Stockden, the respondent's Vice-President of Human Resources, after the termination of merger discussions in late July 1999, the respondent embarked on a review of all aspects of its operations, with a view to improving its business and enhancing its value. Mr Stockden, and many of the respondent's other managers, considered that the system of negotiating changes of any term of employment with the state-registered trade unions had been slow and inefficient in attempting to achieve the competitive business demands of the respondent. Mr Stockden's affidavit says: The inability to implement change to address the Respondent's business needs was also highlighted as a result of the differences observed in the due diligence process for the Respondent's potential merger with Hamersley. There was a substantial cost differential in Hamersley's favour identified which could not be explained other than by increased productivity due to workforce flexibility and the ability to implement change quickly. In order for the Respondent to become more competitive, the Respondent's operations had to become more efficient. Based upon the ongoing implementation of work changes by the Respondent's competitors, the offering of workplace agreements pursuant to the State Workplace Agreements Act was seen as the most obvious way to do this. My opinion and experience in relation to the Award and EBA's set out above, and the similar opinions and experiences of the Vice President Mining and Technical Services and the Vice President Railways and Ports, influenced the Respondent's choice to offer the workplace agreements. The respondent's refusal to bargain collectively 19 By letter dated 10 November 1999, the respondent offered an individual workplace agreement to each of its award employees. It has since refused to continue negotiations for a further enterprise bargaining agreement with the single bargaining unit. There is no provision in any legislation of the State of Western Australia under which the respondent can be compelled to bargain collectively. On 18 and 19 November 1999, each of the first five applicants served on the respondent a notice of initiation of a bargaining period, pursuant to s 170MI of the Workplace Relations Act 1996 (Cth). On 7 and 8 December 1999, each of the first five applicants gave notice to the respondent of intention to take protected industrial action, pursuant to s 170MO of the same Act. Industrial action has since been taken. In the absence of any statutory provision compelling the respondent to bargain with any of the first five applicants, protected industrial action to force such bargaining remains the only legitimate weapon to compel the respondent to bargain collectively. The respondent has refused and still refuses to bargain with any of the first five applicants. Offers of workplace agreements 20 The offers of workplace agreements made on 10 November 1999 were, for the most part, in standard form, except as to the details of the offeree and the quantum of the salary component. The salary components of the various offers differ according to the position and shift arrangements of the particular offeree and the section in which he or she works. They do not differ according to any assessment of the individual value of particular employees. The offer to one category of employees, drivers of trains on the railway, was of appointment to newly created positions of Rail Transport Technicians. Employees accepting such positions were offered "fly-in, fly-out" arrangements as part of their contracts. These arrangements involved those employees working on twelve consecutive days and then having nine consecutive days' leave, with free flights to and from Perth. The rostering arrangements applying to award employees do not allow for a sufficient break to make regular flights to and from Perth a feasible arrangement. 21 The agreements offered contain a number of benefits not available to those who remain award employees. The offer includes an increase of approximately 7 per cent on base salaries, an annual incentive program designed to pay an average of 7.5 per cent of defined base salary based on company, department and individual performance, and an annual salary review based on individual performance. The respondent has reported to its investors that it expects that total salary costs will be in the order of $10,000,000 if all award employees take up the offer. The offer also includes membership of the BHP Superannuation Fund, with the employer contribution increased from 8 per cent of an award employee's defined wage to 14 per cent of a staff employee's defined salary. The offer includes payment out of all accrued sick leave. Award employees accrue sick leave at the rate of ten days per annum. Long-term employees with a great deal of sick leave accrued could expect to receive amounts as high as $65,000 in respect of this benefit. The respondent has made a further provision of $10,000,000 to cover the cost of paying out accrued sick leave. The offer includes future sick leave on the basis that total salary will be paid during absences due to illness or injury and that, in the case of serious illness or injury, a maximum of twelve months' salary continuation will be considered. Other elements of the offer include one additional shift added to annual leave, options for novated leasing of private vehicles and education assistance. 22 In some respects, there are disadvantages to those who accept the offers of individual workplace agreements. One of the standard terms provides that the terms and conditions of employment are those set out in the particular employee's contract of employment and the Staff Handbook as amended from time to time. This may be perceived as reserving to the respondent the right to change at will the terms and conditions set out in the Staff Handbook. By virtue of s 6 of the Workplace Agreements Act 1993 (WA), the effect of a workplace agreement is that no award applies to the contract of employment between an employer and an employee who have entered into the agreement or to the employer as a party to any such contract, so long as the workplace agreement remains in force. For the purposes of that provision, the reference to an award includes an award and any industrial agreement under the Industrial Relations Act 1979 (WA). The result is that employees who have accepted workplace agreements have lost the benefit of any entitlements pursuant to the award and the EBAs. This may be of significance to the nature of methods available to enforce the respondent's obligations to employees. It may also be significant in relation to specific terms and conditions of employment. Although both award employees and staff employees work a nominal forty-hour week, award employees are entitled to overtime payments. The workplace agreements provide that hours worked in excess of forty per week are considered to be paid for in overall salary. The protection of the award with respect to compulsory redundancy, which includes consultation between the respondent and the relevant trade union, is also lost. 23 Within days of making its offers of workplace agreements, the respondent distributed among its award employees a series of documents that explain and advocate the offers. Managers met with employees in small groups, discussed the offers and invited employees to accept them. Employees who have not so far signed have been requested and encouraged repeatedly to accept the offers. Award employees who do not wish to accept the offers have been provided by their unions with two cards, one yellow and one red. Each is addressed to the management of the respondent. The yellow card is in the following terms: First and Final WARNING You have been presented with this card because you have approached me to discuss arrangements in relation to my terms and conditions of employment. PLEASE NOTE: I do not wish to discuss these matters with you. Please direct any further discussions, information or inquiries to my union representatives. ANY FURTHER APPROACHES, NO MATTER HOW NICELY PHRASED, I WILL CONSIDER TO BE HARASSMENT AND INTIMIDATION. Should this occur, all appropriate legal action will be taken. The red card is in the following terms: Notice of intent to take ACTION You have been presented with this card because you have approached me to discuss arrangements in relation to my terms and conditions of employment. You have previously been warned that any such approach would be considered to be harassment and intimidation. As you have ignored this warning, you are hereby notified that I now consider you to have taken actions which amount to harassment and intimidation. I will be informing my union organisers, and requesting they instigate all appropriate responses to this behaviour. 24 According to Mr Stockden's affidavit, 481 out of 1039 award employees of the respondent had signed workplace agreements by 24 January 2000. The respondent's position is that the offers remain open for acceptance at any time by the remaining award employees. As recently as 21 January 2000, two employees accepted the offers. Injury in employment and alteration of position 25 The applicants contend that the fact that some award employees have entered into workplace agreements with the respondent, and have become entitled to the benefits of those agreements, amounts to injury of the remaining award employees in their employment, or to alteration of the position of the remaining award employees to their prejudice, for the purposes of s 298K(1) of the Workplace Relations Act 1996 (Cth). It is clear that there has been no change to the terms and conditions on which the remaining award employees perform their work for the respondent. Indeed, the respondent's position is that it is adamant that those terms and conditions will not be changed by collective bargaining and that the award employees who do not accept offers of workplace agreements will remain on the same terms and conditions they have had until now. The only change has been arguably to improve, at least in some respects, the terms and conditions on which former award employees who are now parties to workplace agreements perform their work for the respondent. The effect of this change is to place the continuing award employees in a position which is arguably disadvantageous when compared with the position of their workmates who have accepted workplace agreements. 26 The question is whether such a relative change can amount to injury in employment or to alteration of the employee's position to his or her prejudice. On this question, some guidance can be found in authority. In Health Services Union of Australia v Tasmania (1996) 73 IR 140, the Industrial Relations Court of Australia considered an application for an interlocutory injunction pursuant to s 334(1) of the Industrial Relations Act 1988 (Cth) (now repealed), the terms of which are relevantly indistinguishable from those of s 298K(1). In that case, a wage increase made available to the bulk of employees was not made available to members of a particular registered organisation of employees. At 145, Marshall J said: It amounts to victimisation of the organisation and of its members in the workplace. But the question still arises as to whether it, in terms, involves a breach of s 334 of the IR Act. I believe a strong case has been made out by the applicants that it does so in the circumstances of this proceeding. The action of the respondent in singling out a member of the HSUA for denial of a wage increase is in the circumstances an "injury" to such an employee in "his or her employment" within s 334(1)(a)(i) of the Act. The action of the respondent involved treating HSUA members "….differently to other employees and for reasons not associated with the manner in which (they are) performing (their) work….". See Squires v Flight Stewards Association of Australia (1982) 2 IR 155 at 164. 27 In Maritime Union of Australia v Geraldton Port Authority [1999] FCA 899, at [225] - [233], R D Nicholson J considered the meaning of "injury in employment" and "position" in s 298K(1) of the Workplace Relations Act 1996 (Cth). In par 231, his Honour referred to the decision of Marshall J in Health Services Union of Australia v Tasmania, with no suggestion that the decision was wrong and ought not to be followed. 28 United Firefighters Union of Australia v Country Fire Authority (Industrial Relations Court of Australia, North J, 24 December 1996, unreported) also concerned an application for an interlocutory injunction to restrain an alleged contravention of s 334(1) of the Industrial Relations Act 1988 (Cth). The alleged contravention consisted of the creation of a new classification, not covered by the relevant award, and the appointment of various existing employees to that new classification on the signing by those employees of individual employment agreements which afforded them benefits not available to those who relied on the relevant award. Seven employees had applied for appointment to the new classification but had declined to sign individual employment agreements and had not been appointed. In par 10 and par 11 of his judgment, North J said: The respondent submitted that there was no relevant injury or alteration because each of the seven agreed, when applying for the appointment as Operations Officer, to sign an individual employment agreement. There is no injury or alteration of position to the prejudice of the seven - they have simply failed to satisfy a condition required to obtain the appointment. I am not concerned, at the present stage of proceedings, to make a final determination of this question. However, I am satisfied that there are serious issues to be tried. It is arguable that the seven who have not signed an individual employment agreement are being paid significantly less than the salary of an Operations Officer and are not being accorded the conditions applicable to Operations Officers because they want their salaries and conditions governed by award and not individual employment agreements. Further, the requirement to sign an individual employment agreement as a prerequisite to retaining an appointment by way of promotion is to alter the position of the employee to the employee's prejudice, or to injure the employee in the employee's employment. The alteration and injury arguably flow from the fact that the requirement to sign an individual employment agreement was not previously a requirement for promotion. Again, his Honour obviously took the view that it is at least arguable that a relative upgrading of other employees, without actual downgrading of the specified employee, can amount to an injury in the specific employee's employment or to alteration of his or her position to his or her prejudice. 29 In Independent Education Union of Australia v Canonical Administrators, Barkly Street, Bendigo (1998) 157 ALR 531, Ryan J considered the meaning of the phrase "injure an employee in his or her employment or alter the position of an employee to the employee's prejudice" in s 170MU of the Workplace Relations Act 1996 (Cth). At 548, his Honour said: …the subsection precludes an employer from discriminating against an employee wholly or partly for the same reason, by, for example, the allocation of less congenial shifts or rosters or affording fewer opportunities for overtime than are extended to other employees. The reference to affording fewer opportunities for overtime indicates that his Honour took the view that a relative upgrading of benefits to other employees, without any actual downgrading of benefits to the specific employee, could amount to injury to the specific employee in his or her employment or to alteration of that employee's position to his or her prejudice. 30 I am obliged to take the same view in the present case. It is seriously arguable that, by offering significant benefits only to those who are prepared to enter into workplace agreements, by entering into such agreements with those who accept the offers, and by refusing to alter the terms and conditions on which the remaining award employees are employed, the respondent has injured the remaining award employees in their employment, or has altered the position of each of them to his or her prejudice. It is strongly arguable that an actual diminution in the terms and conditions of employment of an employee is unnecessary before it can be said that that employee has been injured in his or her employment, or has had his or her position altered to his or her prejudice. The offer of superior terms and conditions to other employees, coupled with a refusal to offer them to those who wish to have their employment regulated in a collective way, is arguably conduct which falls within par (b) or par (c) of s 298K(1) of the Workplace Relations Act 1996 (Cth), if it is engaged in for a prohibited reason. 31 There is also evidence, put on behalf of the applicants, to suggest that the continuing award employees of the respondent are being subjected to injury to their employment, or alteration of their positions to their prejudice, other than by the relative improvement of the terms and conditions of employment of those who have accepted the respondent's offers of workplace agreements. There is evidence of denials by management that it was "discriminating" against continuing award employees, but admissions that the respondent was "differentiating" between employees. This evidence is not denied in the respondent's evidence. 32 One train driver, desiring to take advantage of the "fly-in, fly-out" scheme and free air travel, applied for appointment to one of the newly created positions of Rail Transport Technician, which carries those entitlements. He was advised by the respondent that he could only apply for the position if he elected to enter a workplace agreement. Managers have made it clear that they subscribe to a concept of loyalty to the respondent, which is manifested by acceptance of workplace agreements. There is disputed evidence that one applicant for the job of a charge-hand was told that he could not have the job if he did not sign a workplace agreement. A supervisor, Ron Anderson, is alleged to have told employees under his supervision that they would be transferred 450 kilometres from their present work site to Port Hedland if they did not accept the offer of staff employment. Mr Anderson denies this allegation. Paul Kilmartin, an electrician employed at Nelson Point, alleges that award employees are called upon to do overtime and call outs (attendance at work from home on short notice), whereas employees on workplace agreements are not called upon to do work beyond their normal hours. This is seen to be discriminatory, because those on workplace agreements are said to be paid higher salaries to cover extra hours of work, whereas award employees are required to work extra hours in order to be paid more than their basic wage rates. Employees on workplace agreements are seen as taking the extra money without being required to perform the extra work. Mr Stockden denies that there has been any change in the application of overtime and call out arrangements as between award employees and those who have entered into workplace agreements. 33 The respondent has been at pains to assert its formal neutrality as between employees who have entered into workplace agreements and those who remain award employees. Mr Stockden has sworn that the respondent has a "clear policy" that employees who choose not to take up the offer of a workplace agreement will not be subject to any "illegitimate treatment". According to his affidavit, under no circumstances will the respondent permit employees who do not take up offers of workplace agreements to have their contracts of employment terminated for that reason. 34 Evidence of actual discrimination is mostly disputed. Nonetheless, there is a serious question to be tried as to whether, by actively disadvantaging some continuing award employees, the respondent has injured them in their employment, or altered their positions to their prejudice, for one or more of the prohibited reasons alleged. Prohibited reasons 35 Of course, conduct falling within s 298K(1)(b) or (c) is only a contravention of s 298K(1) if done for a prohibited reason, or for reasons that include a prohibited reason. In the present case, each of the prohibited reasons alleged exists. The majority of the award employees who have not accepted offers of workplace agreements are members of industrial associations. The concept of membership, for the purposes of this provision, is more than a mere formality. It includes the notion of the ability to have terms and conditions of employment regulated on a collective basis. See the judgment of Wilcox and Cooper JJ in Davids Distribution Pty Ltd v National Union of Workers [1999] FCA 1108, at [106]-[107], quoted later in these reasons for judgment. Some award employees are officers or delegates of those industrial associations, particularly if they are convenors, deputy convenors or shop stewards. All of the remaining award employees are entitled to the benefit of industrial instruments, in the form of the EBAs and the Industrial Relations Agreement, and of an order of an industrial body, in the form of the award. Further, the majority of the remaining award employees are members of industrial associations that are seeking better industrial conditions through the collective bargaining process. At least some of them are dissatisfied with their existing conditions, having participated in meetings in which representatives of the state-registered trade unions were authorised to pursue better conditions through the collective bargaining process. 36 Given the existence of these prohibited reasons, the applicants have the benefit of the statutory presumption in s 298V that the respondent's conduct was carried out for one or more of those prohibited reasons, or for reasons that included one or more of those prohibited reasons. Section 298V casts on the respondent the onus of proving that the conduct was not carried out for any of those prohibited reasons. Mr Stockden has sworn a bare denial that the reason for the respondent's decision to offer its employees workplace agreements was connected with the prohibited reasons. It does not appear from his affidavit that he was the person, or one of the persons, responsible for the decision to make the offers. I have quoted earlier in these reasons for judgment the relevant passage from his affidavit, which refers to Mr Stockden's opinion, and to the opinions of two other managers, but is silent as to the identity of the decision-maker. The respondent has not so far put in evidence any minute of a resolution of its board of directors or of any executive committee, or any memorandum of any manager, setting out the decision. Reference to such a minute or memorandum might have made it possible to judge whether one or more of the reasons for the decision fell within the prohibited reasons category. As the evidence stands, the respondent has not begun to discharge the onus resting on it under s 298V. In Davids Distribution Pty Ltd v National Union of Workers [1999] FCA 1108, at [110], Wilcox and Cooper JJ said: Where there is an application for interim relief in proceedings under the Division [Division 6 of Part XA of the Workplace Relations Act 1996 (Cth)], the onus remains upon the applicant to demonstrate that there is a serious question to be tried that the dismissal occurred for a prohibited reason. If a serious question to be tried is made out in respect of the other ingredients of the alleged contravention, s 298V operates to establish there is a serious question to be tried that the dismissal was for a prohibited reason. It remains available to the employer to demonstrate at the interlocutory stage that the reason for the dismissal was other than for a prohibited reason. The weight of that evidence may be such as to persuade the Court there is no serious question to be tried. The respondent in the present case has not presented evidence sufficient to persuade the Court that there is no serious question to be tried. There exists, therefore, a serious question to be tried as to whether the respondent has engaged in conduct that amounts to a contravention of s 298K(1) of the Workplace Relations Act 1996 (Cth). Inducement to stop being union members 37 The applicants also relied on the respondent's entry into workplace agreements with a number of former award employees to found their allegation that the respondent has induced employees to stop being members of industrial associations, contrary to s 298M of the Workplace Relations Act 1996 (Cth). It is not contended that there has been inducement by threats or promises. In the terms of the section, the allegation is that there has been inducement "otherwise" than by threats or promises. At its most basic, the argument is simple. It is that conduct having the effect of causing members of a union to stop being members of a union induces them to do so, even if this is not the intention of the employer concerned. 38 The argument that the effect of an inducement need not be intended is supported by the judgment of the Federal Court of Australia in Trade Practices Commission v Mobil Oil Australia Ltd (1984) 3 FCR 168. In that case, Toohey J was dealing with an application for the imposition of pecuniary penalties in respect of alleged contraventions of s 48 of the Trade Practices Act 1974 (Cth). The statutory definition of the conduct alleged involved inducing, or attempting to induce, a specified person not to do certain things. At 183-4, his Honour held that, in the case of attempted inducement, there must be an intention to bring about the prohibited result, but, in the case of an allegation of inducement, the statutory prohibition of the conduct in question was absolute in the sense that proof of the conduct proscribed was sufficient. The provision was concerned with conduct, not with the mental element that may accompany the conduct. 39 In the present case, counsel for the respondent argued that the Mobil case was distinguishable. Section 298M refers to inducement "whether by threats or promises or otherwise". The submission was that the word "otherwise" must be read down by reference to the other words with which it is associated, namely "threats or promises". It is difficult to conceive of conduct that might not be a threat or promise, but might fit into some supposed category of similar acts to threats or promises. If the argument on behalf of the respondent be accepted, the category of inducement "otherwise" than threat or promise might still be broad enough to include the conferment of a benefit which brings about the result, without the intention of bringing about that result. It is also arguable that the words "or otherwise" are designed to expand the phrase "by threats or promises" and to make it clear that any form of inducement is proscribed. The case put on behalf of the applicant, that inducement does not require intention to produce the result, supported as it is by authority, is seriously arguable. 40 The evidence on behalf of the applicants is that union membership is considered to be, and is in fact, less attractive to employees if they cannot have the terms and conditions of their employment determined by collective bargaining than if they can. Further, the evidence is that employees who enter into individual agreements, such as those offered by the respondent, tend to relinquish their union membership. The result can be the end of the capacity of a union to function effectively in the workplace. The evidence is that this has occurred in the workplaces of Hamersley and Robe River. The switch to individual contracts has been followed by the almost total elimination of union membership among employees of Hamersley and Robe River. Already, a significant number of members of the first five applicants employed by the respondent have resigned their membership. Many of the stated reasons for resignation refer to the making of a workplace agreement by the person concerned. The evidence of Gary Norman Wood, Secretary of the Mining and Energy Division, West Australian District, of the second applicant, based on his experience of events that occurred in relation to Hamersley and Robe River and another workplace in Western Australia, is that more resignations are likely at the end of a dues period when accounts are sent out seeking payment of further union dues. The evidence of Mr Stockden is that the respondent has continued to collect union dues by payroll deduction where its employees so desire. The total number of persons for whom union dues are deducted has fallen from 805 at 11 November 1999 to 636 at 24 January 2000. The evidence on behalf of the applicants also concerns a drop in participation in union affairs by those who have entered into workplace agreements with the respondent. Numbers attending mass meetings have fallen. Delegates who have accepted the respondent's offers and entered into workplace agreements have ceased to attend meetings. I am satisfied that it is likely that union membership will decline substantially among those who have become parties to workplace agreements with the respondent. It is therefore seriously arguable that the effect of the respondent's conduct will be to induce a substantial number of its employees to stop being members of the state-registered trade unions, or the first five applicants. A serious question to be tried has been raised as to whether this constitutes a contravention of s 298M, even in the absence of any evidence as to the respondent's intention. 41 That is not to say that there is not evidence from which the respondent's intention to induce its employees to cease to be members of industrial associations can be inferred. As early as 30 November 1998, Paul Jeans, Manager - BHP Minerals, addressed the opening session of a leadership development program, conducted by the respondent. The last paragraph of the respondent's document relating to this address reads as follows: I would like to leave you all with a couple of questions which you may be able to answer. I do not have a view one way or another in respect to these questions. Firstly "are we in a position to operate as a non union site?" Secondly "If we could operate without unions how would this impact on the business?" This suggests that, at an early date, the respondent's managers were at least giving consideration to ridding its workplaces of unions altogether. 42 I have already referred to the developments at Hamersley, and to the respondent's knowledge of the results in terms of lower employment costs, through its due diligence examinations in the course of the merger negotiations. There is evidence that the respondent has sought, and continues to seek, to emulate Hamersley in that respect. Comparisons of labour costs were presented to the single bargaining unit in the negotiations in 1999 in relation to a possible new enterprise bargaining agreement. They were accompanied by expressions of desire on behalf of the respondent to decrease its labour costs. In April 1999, Derek Miller, a senior manager of the respondent, informed Mr Wood, the chairman of the single bargaining unit, that the respondent then saw unions as third parties in the regulation of employment matters. This was perceived by Mr Wood as in stark contrast to the way in which the management of the respondent had in the past characterised its relationship with unions. 43 The respondent has made very clear in a number of ways its desire to move from the regulation of the terms and conditions of employment of its employees by collective bargaining to regulation by individual workplace agreements. In a BHP Investor Relations Investment Briefing Paper, dated November 1999, investors were informed of impending changes in employment relations, which were said to be "designed to overcome limitations and restrictions on the pace of change within the existing industrial relations system". In a briefing note, in which the respondent replied to recommendations from a combined unions shop stewards' group meeting, the respondent said: We are not prepared to go back to a system of regulated labour relations without options for direct employer-employee agreements. In a briefing note, dated 23 November 1999, containing the respondent's response to union requests for negotiation, the respondent said: We must continue to make dramatic improvements in productivity and this will not be possible without the introduction of direct employer-employee agreements. It must also be borne in mind that the respondent has refused steadfastly to become involved in negotiations for any change to the existing terms and conditions of employment of award employees, which have been determined collectively. 44 Various persons involved in the management of the respondent, and of its holding corporation, have made public comments about the controversy created by the offers of workplace agreements. They include Mr Paul Anderson, Chief Executive of the respondent's holding corporation, and Mr Bob Kirkby, President of the holding corporation's Steel-making and Energy Materials Division. Those comments emphasised a perceived need for flexibility, the slowness of making change under a collective system, and the need to be competitive. 45 In formal terms, the respondent has endeavoured to make it very clear that both acceptance of offers of workplace agreements and continued membership of unions are options entirely for the employees to accept or reject, as they see fit. Nonetheless, the respondent's preference is obviously for individual agreements and decidedly against collective bargaining. It seeks to lower its employment costs, in line with Hamersley and Robe River. It seeks the "flexibility" to make changes in working arrangements, without having to discuss those changes with unions or to have them considered by employees collectively. Whilst it maintains that it is content for those on individual agreements to continue to be members of the union, it is obvious that such membership is intended by the respondent to have no significance in relation to the determination of terms and conditions of employment. Whether or not a particular employee is a member of a union, his or her terms and conditions of employment will be the subject of decision by the respondent, on a take-it-or-leave-it basis. 46 In Davids Distribution Pty Ltd v National Union of Workers [1999] FCA 1108, at [106] - [107], Wilcox and Cooper JJ said: Section 298K forbids an employer from dismissing an employee for a prohibited reason or for reasons that include a prohibited reason. The prohibited reasons are contained in s 298L. Each of the reasons relates to the exercise of the right of an employee or independent contractor to join, or refuse to join, an "industrial association" (as defined) and, where the employee becomes a member of an industrial association, to take collective action by or through the industrial association in pursuit of their industrial interests. Section 298L(1)(l) is concerned to ensure that an employee who is dissatisfied with his or her industrial conditions is not discouraged from participation in concerted action engaged in by the industrial association of which the employee is a member and which is seeking better industrial conditions. The objective of s 298K is to ensure the threat of dismissal or discriminatory treatment cannot be used by an employer to destroy or frustrate an employee's right to join an industrial association and to take an active role in that association to promote the industrial interests of both the employee and association. In the context of the Act, Part XA does not stand alone. It is aimed at ensuring that employees may band together, if they wish, for collective bargaining of the type provided for in the Act to achieve the broader objectives of the Act as contained in s 3. In this regard the Act operates in the same way and to the same ends as similar legislation in the United States of America …. That which is protected by such legislation is more than the right to be a member. It is the right to participate in protected union activities, including the taking of collective industrial action against an employer to seek to obtain better industrial conditions …. The concept of union membership contemplated by the respondent would be a mere shell. It would be devoid of any meaningful benefit to the employees who retained it, because they would be unable to exercise their rights as members to engage in collective bargaining as to their terms and conditions of employment. 47 It is a reasonable inference from the facts known at this stage that the respondent desires to rid its workplaces of union membership, in the same way that Hamersley and Robe River have done. It is a reasonable inference that the respondent maintains a formal stance of neutrality with respect to union membership by its employees, but with the intention that union membership will be of no consequence whatever to those of its employees who retain it. It is a reasonable inference that the respondent expects, and hopes, that the irrelevance of union membership in its workplaces will lead to a decline in the willingness of its employees to continue to be union members. In these senses, a serious question to be tried exists as to whether the respondent has engaged in conduct which contravenes s 298M of the Workplace Relations Act 1996 (Cth), even if the inducement proscribed by that section is required to contain an element of intention. Breach of contract 48 The allegation of breaches of contracts of employment was relied upon by counsel for the applicants by way of a subsidiary point, rather than being placed at the forefront of the argument. I am nevertheless bound to consider it. It arises from the manner in which award employees have been engaged in the past and from the terms of the award. The documents given to a new employee on engagement contained the following: CONDITIONS OF EMPLOYMENT: The terms and conditions of employment which [sic] include, but are not limited to those set out herein. In general, the terms and conditions of employment are as prescribed in the Iron Ore Production and Processing (BHP Iron Ore Ltd) Award No. A29 of 1984 and the BHP Iron Ore Enterprise Bargaining Agreement 1993 (EBA) and the Stage I & II Award Restructuring Agreements. Where any inconsistencies exist, the conditions as set out in the EBA shall prevail. Employment with BHP Iron Ore Pty Ltd is dependent on acceptance of all the terms and conditions of employment. 49 The incorporation of terms of awards into contracts of employment raises difficult issues of fact in each case. It has not been possible to investigate fully the issues in the context of this proceeding so far. Nevertheless, it is seriously arguable that the passage quoted from the respondent's standard conditions of employment is sufficient to incorporate expressly, by reference, the terms of the award into the contract of employment of each employee, so as to make the terms of the award terms of the contract of employment. 50 One of the terms of the award is cl 5(14)(a), which is in the following terms: No contract of employment shall be made between the employer and any employee which contains any term or condition which is inconsistent with or contrary to the provisions of this award;…. If the terms of the award are terms of each award employee's contract of employment, on its face this term would operate to give each award employee a contractual entitlement, as against the respondent, to have the respondent refrain from entering into a contract of employment inconsistent with the award with any other award employee. In other words, it would be a breach of the contract of employment of one employee if the respondent entered into a contract inconsistent with the award with another employee. 51 Counsel for the respondent argued that this award term was designed only to prevent contracting out of the award by an individual employee, although he drew attention to s 114 of the Industrial Relations Act 1979 (WA), which contains a prohibition on contracting out. His argument was that incorporation of this award term into the contract of employment required the award term to be read down, so that it bound the respondent contractually only in respect of the terms of the particular employee's contract, leaving the respondent free (so far as contractual obligations are concerned) to make a contract with any other employee that was inconsistent with the award. I am not persuaded that this argument is a complete answer to the applicants' argument. Even viewed as a clause of the award, the clause imposes a duty of a general nature on the respondent. If the respondent entered into a contract inconsistent with the award with any of its employees, the right to enforce the award clause as an award clause would not be limited to the particular employee with whom the inconsistent contract had been made. Reading down the award term when it became a term of each contract would require a considerable modification of the award term. It would be unnecessary to read down the term to make sense of it in the context of an individual contract of employment. In a real sense, each employee does have an interest in the terms and conditions upon which his or her employer engages other employees. Each employee has an interest in ensuring that the employer does not treat fellow employees either with favour or with disfavour. The award term is capable of operating sensibly as part of an individual contract of employment. It is therefore arguable that the respondent was bound by contract to each award employee not to enter into, with any other award employee, a contract of employment inconsistent with the award. 52 The award was originally made pursuant to the Industrial Relations Act 1979 (WA) and was given statutory force by that Act. By a subsequent Act, the Workplace Agreements Act 1993 (WA), employers and employees were authorised to enter into workplace agreements, which, when registered, acquire statutory force and effect. By s 6 of the 1993 Act, the statutory force given to an award by the 1979Act is removed. But it is not removed altogether. The award is not a nullity. The award is simply unenforceable as an award in respect of a particular employee who has entered into a registered individual workplace agreement, or a number of employees who have entered into a registered collective workplace agreement, and the particular employer party to such an agreement. An employer bound by an award in respect of employees who have not entered into workplace agreements continues to be bound by that award in respect of those employees, even though the employer might have entered into workplace agreements with other employees. 53 The position is complicated if, as is arguable in the present case, the term of the award has become a term of the contract of employment of each award employee, and has thereby become enforceable by action for breach of contract, in addition to whatever statutory effect it may have. The 1993 Act contains nothing to suggest that an employer is entitled to enter into a workplace agreement if to do so would be in breach of the employer's legal obligations in some respect. Of course, parties to a contract can agree to bring that contract to an end, or to vary it. The fact that the respondent has a contractual obligation to an award employee not to enter into a contract inconsistent with the award does not stop those parties entering into a workplace agreement if they agree to do so. If the respondent has a contractual obligation to each award employee not to enter into a contract of employment with any other employee inconsistent with the award, then it will be in breach of this obligation if it enters into a workplace agreement with any other employee, and the workplace agreement is inconsistent with the award. 54 A conclusion that the respondent could not enter into workplace agreements inconsistent with the award without breach of the existing contracts of employment of other award employees is not such as to frustrate the operation of the Workplace Agreements Act 1993 (WA). That Act does not compel people to enter into workplace agreements; it merely enables such agreements to become enforceable and to override earlier awards and other industrial instruments as between the parties to workplace agreements. If an employer cannot enter into individual workplace agreements without being in breach of its contracts with its other employees, then it simply cannot avail itself lawfully of the terms of the Act. The Act does not give employers a licence to override their other legal obligations. In such a situation, the employer would only be able to enter into individual workplace agreements inconsistent with its contractual obligations if all of its employees to whom it owed those contractual obligations were prepared to agree. The Act makes provision for collective workplace agreements. 55 It is also arguable that the individual workplace agreements offered by the respondent to its award employees, and accepted by a number of them, are inconsistent with the award. The conditions for compulsory redundancy of employees are perhaps the most glaring inconsistency. There may be other entitlements not provided for in the workplace agreements but provided for in the award. Of course, no objection can be taken to payment of rates of pay above those specified in the award or to the affording of better terms and conditions, which the workplace agreements do in many respects. It is only where it falls below the standards specified in the award that a workplace agreement could be said to be inconsistent with the award. 56 As the foregoing discussion indicates, I am of the view that the allegation that the respondent is in breach of its contractual obligations to its remaining award employees, because it has entered into workplace agreements with other employees and those workplace agreements are inconsistent with the award, raises a serious question to be tried. Balance of convenience 57 Having found that there are serious questions to be tried on which, if the applicants are successful at trial, they would be entitled to relief, I must consider whether the balance of convenience is such as to lead the Court to consider the grant of an interlocutory injunction. It must be remembered that the form of the injunction sought is limited to restraining the respondent from entering into any further workplace agreements between now and the determination of the proceeding. Consideration of the balance of convenience must be related to the kind of injunction sought. Much of the applicants' affidavit material was concerned with the results of what has occurred already. It is said that it is unsatisfactory to have employees of the respondent performing similar work, often side by side, on completely different terms and conditions, particularly as to rates of pay. Award employees who have refused to enter into workplace agreements have become resentful of their colleagues who have accepted the respondent's offers of workplace agreements. Tensions have been evident in workplaces and in the remote communities in which many of the respondent's employees and their families reside. In one case, there has even been tension within a family because different members initially took different courses. The injunction sought will not remedy these problems. It will not operate to undo what has already occurred. 58 The injunction sought is designed only to prevent what the applicants say will be the worsening of the situation. If the offers of workplace agreements remain open, there is the chance that more and more employees will accept them. Those who hold out will become increasingly isolated. The first five applicants will find it increasingly difficult to function as unions within the workplaces, because their membership will decline and many of those who remain members will cease to participate in the conduct of the business of unions. Counsel for the applicants argued that it was feasible to suppose that so much might be lost that, even if the applicants were to succeed at the trial, the position would be irretrievable. 59 There is little in the evidence to set against the possibility of further harm to the applicants and the remaining award employees from continuation of the respondent's conduct. The respondent seeks to be entitled to continue to enter into workplace agreements with its award employees. Despite its rhetoric about flexibility and competitiveness, it has offered no evidence at all of any loss it would suffer or material gains it would forego if an injunction were granted. If there be such losses, or gains foregone, they should be recoverable under the usual undertaking in damages, which counsel for the applicants offered to the Court. The respondent has therefore been unable to point to any item of significance in its favour, to be put into the balance of convenience. Counsel for the respondent did suggest that there are third parties who might suffer if an injunction were granted, namely award employees who have not yet accepted the respondent's offers, but might decide to do so between now and the determination of the proceeding. They would be unable to avail themselves of what the respondent contends are superior benefits available under its workplace agreements. It is true that the possibility exists that there might be such persons. To some extent, the remedy lies in the hands of the respondent itself. If its conduct turns out to be lawful and it wishes to reward its employees who signify their desire to avail themselves of workplace agreements while the proceeding is pending, it will be able to do so. There is also the possibility that anyone prevented by the presence of an injunction from becoming a party to a workplace agreement, and suffering loss for that reason, could be compensated by means of the undertaking in damages offered on behalf of the applicants. Otherwise, the position can be dealt with by means of liberty to apply. If there should be a demand from award employees for the offers to be reopened before the proceeding is determined, the respondent could apply to the Court for a variation of the injunction. Discretion 60 The grant of an injunction is ultimately a matter of discretion. It is appropriate to consider globally the nature of any serious question to be tried which arises in a proceeding, together with the balance of convenience. In the present case, such a global consideration favours the grant of an injunction. It is appropriate that the applicants should be entitled to have a trial of their application, after proper preparation on both sides, without the constant fear that the conduct of which they complain will continue. On the evidence, the respondent will lose nothing of significance. The interlocutory injunction sought is clearly ancillary to the final relief sought in the proceeding. 61 Counsel for the respondent drew my attention to the judgment of North J in Australian Paper Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia (1998) 81 IR 15. In that case, at 23-27, his Honour expressed the considerations that a Court ought to have in mind when invited to grant an injunction in the context of an industrial dispute. I agree respectfully with what North J said in that case. It is unnecessary to quote from his Honour's judgment. The remedy of interim or interlocutory injunction has often proved to be a blunt instrument when used in aid of one party to an industrial dispute, especially when courts have eschewed consideration of the industrial merits of the parties. Its use to stifle industrial action that is a manifestation of deeply-felt grievances, resulting in the continuation, and even exacerbation, of those grievances and the removal of any means of redressing them, has at times had unsatisfactory results, of the kinds referred to by North J. I approach with great caution the question of the exercise of my discretion whether to grant an injunction in the present case. 62 Although this is a situation in which the parties include institutional litigants greatly experienced in the negotiation of industrial disputes, the respondent has ruled out negotiation as a means of resolving the issues surrounding the terms and conditions of employment of continuing award employees. The respondent has sought unilaterally to arrogate to itself the right to determine any changes to the terms and conditions of its employees. Nor is this a case in which the grant of an interlocutory injunction is likely to amount to a final victory for the applicants. Such is often the case where interlocutory injunctions are granted to restrain industrial action. This is a case in which the issues in dispute can only be resolved at a trial. The injunction sought will not give victory to the applicants, obviating any need to go to trial. Nor will it undo in any sense what has already occurred. It is designed only to maintain the situation as it exists. Whether that situation should be reversed will only be determined after trial. This case does not involve any question of a false balance of convenience. It does not involve a balance of economic loss on the one hand against the absence of economic loss on the other. In essence, the case is not about economic loss; evidence was not led on behalf of the first five applicants of any quantification of the likely economic loss due to lost subscriptions if membership declines. As I have said, evidence was not led by the respondent about possible economic loss, or economic gains foregone, in the event that an injunction is granted. The considerations referred to by North J do not suggest that I should refrain from granting an interlocutory injunction in the present case. 63 In all of the circumstances, I have decided that it is appropriate to grant an injunction restraining the respondent from entering into further workplace agreements, pending the hearing and determination of the proceeding. As I have said, counsel for the applicants has offered the usual undertaking in damages, which will enable the Court to order that the respondent be compensated if it should turn out at the trial that the injunction should not have been granted and the respondent should be able to establish that it has suffered loss in consequence of the granting of the injunction. Transfer of the proceeding to Western Australia 64 By notice of motion filed on 25 January 2000, the respondent sought an order that the proceeding be transferred to the Western Australian registry of the Court. Although once I have dealt with the application for an interlocutory injunction, the proceeding will be placed in the docket of a judge in Melbourne in the ordinary course, counsel for the respondent elected to move the Court on 27 January for an order that the proceeding be transferred to the Western Australia District Registry of the Court. Counsel for the respondent initially referred to o 30 r 6(2) of the Federal Court Rules, under which the Court may direct that the trial, or part of the trial, of a proceeding be held at a place other than the proper place. "Proper place" is defined in o 1 r 4 as the place at which a proceeding was commenced or to which it has been transferred. The power of the Court to transfer a proceeding to a place other than the then proper place is found in o 10 r 1(2)(f) of the Federal Court Rules. In National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155, the Full Court dealt with the principles governing the determination of such an application. See especially at 161-163. It is unnecessary for me to set out those principles in these reasons for judgment. 65 Much of the material advanced by the respondent in support of the motion is relevant to the conduct of the trial. An attempt is made to identify numbers of persons who might be called as witnesses or whose presence at the trial might be otherwise relevant. It is much too early to make decisions about the place at which any trial might occur. The issues are yet to be defined by pleadings. Consideration is yet to be given to whether the evidence in chief of witnesses might be given by affidavit, with cross-examination only if required. Only when the extent of oral evidence is known could decisions be made about the appropriate venue for the trial. It must be remembered that this is a national Court. It is possible for the trial to be conducted at any place in Australia, irrespective of the situation of the registry in which the file is kept. The Court could sit in the Pilbara to suit the convenience of witnesses who reside there, in Perth to suit the convenience of witnesses who reside there, and anywhere else as necessary. A decision to change the proper place of a proceeding depends more on the effect that such a change might have in relation to the conduct of interlocutory proceedings than on matters relevant to the trial. Weight must be given to the choice of an applicant to commence a proceeding at a particular place, unless that choice be capricious. The balance of convenience in the conduct of interlocutory applications will be relevant, although not necessarily decisive. In this context, advances in electronic communications make the proper place of a proceeding less significant than it might have been in the past. Instructions can be obtained and documents can be prepared and filed with greater ease than in earlier times. The Court has facilities for the conduct of interlocutory hearings by means of videoconferences between parties and their representatives in different cities. Where necessary, a judge can travel to another place for an interlocutory hearing. 66 In the present case, the first five applicants have coordinated their efforts through the Australian Council of Trade Unions, which has its head office in Melbourne, and have chosen to be represented by specialist Melbourne-based lawyers. Their choice of Melbourne as the proper place is not capricious. With knowledge of the proper place of the proceeding, the respondent chose to be represented by a national firm of solicitors with offices in both Perth and Melbourne, and to brief for the purposes of this interlocutory application senior counsel who resides in Sydney. It is true that the case has many connections with the state of Western Australia. It is also true that the Court has a panel of specialist industrial relations judges based in Melbourne. In all of the circumstances, it has not been shown that the case can be conducted or continued more suitably in Western Australia, bearing in mind the interests of all parties, the aims of justice in the determination of the issues between them, and the most efficient administration of the Court. I therefore propose to dismiss the motion for an order that the proceeding be transferred to the Western Australia District Registry. 67 The normal order accompanying the grant of an interlocutory injunction is an order that the costs of all parties be reserved. Although the respondent has failed in its motion for the transfer of the proceeding to the Western Australia District Registry, the hearing of that motion has not involved so much preparation or occupied so much of the time of the Court as to warrant the making of a separate order. The order will be that the costs of all parties are reserved. 68 In the near future, the proceeding will be listed for directions before a judge in Melbourne. In the meantime, I propose also to reserve liberty to any party to apply on forty-eight hours' written notice. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. Associate: Dated: 31 January 2000 Counsel for the Applicants: Mr JWK Burnside QC, Mr M Bromberg & Mr M Irving Solicitors for the Applicants: Maurice Blackburn Cashman Counsel for the Respondent: Mr RJ Buchanan QC & Mr HJ Dixon Solicitors for the Respondent: Mallesons Stephen Jaques Date of Hearing: 27 January 2000 Date of Judgment: 31 January 2000