FEDERAL COURT OF AUSTRALIA Australian Workers' Union v BHP Iron-Ore Pty Ltd [2000] FCA 770 AUSTRALIAN WORKERS' UNION, CONSTRUCTION FORESTRY MINING & ENERGY UNION, AUTOMOTIVE FOOD METALS ENGINEERING PRINTING & KINDRED INDUSTRIES UNION, COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING & ALLIED SERVICES UNION OF AUSTRALIA, TRANSPORT WORKERS' UNION OF AUSTRALIA, DOUGLAS STEAD, ROSS KOMEROA, IAN BURTENSHAW, PHILLIP ROONEY and ROSS BEGGS v BHP IRON-ORE PTY LTD V 24 of 2000 RYAN J MELBOURNE 8 JUNE 2000 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 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 Seventh Applicant IAN BURTENSHAW Eighth Applicant PHILLIP ROONEY Ninth Applicant ROSS BEGGS Tenth Applicant AND: BHP IRON-ORE PTY LTD Respondent JUDGE: RYAN J DATE OF ORDER: 8 JUNE 2000 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: The order of Gray J of 31 January 2000 as varied by the order of the Full Court of 7 April 2000 be further varied: (a) by adding before paragraph 1 thereof: THE COURT FURTHER NOTES that the respondent by its Counsel undertakes to the Court to (a) 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 paragraph 1A 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. (b) by inserting after paragraph 1 thereof the following paragraphs: 1A. The first to fifth applicants, by themselves, their servants or agents, be restrained, until the hearing and determination of this proceeding or further order, from organising or engaging in industrial action against the respondent in support of a claim for, or in support of claims for terms and conditions to be included in, an industrial agreement between the first to fifth applicants or any of them and the respondent. 1B. Until further order the respondent be restrained from engaging in industrial action against the first to fifth applicants or any of them or any of their members in opposition to a claim for the making of an industrial agreement between the first to fifth applicants or any of them and the respondent or for the inclusion in such an agreement of any term or condition. 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 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 Seventh Applicant IAN BURTENSHAW Eighth Applicant PHILLIP ROONEY Ninth Applicant ROSS BEGGS Tenth Applicant AND: BHP IRON-ORE PTY LTD Respondent JUDGE: RYAN J DATE: 8 JUNE 2000 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 On 7 April 2000 a Full Court of this Court published reasons for judgment in an appeal against an interlocutory injunction granted by Gray J on 31 January 2000. His Honour had restrained the respondent ("BHPIO") until the hearing and determination of the application or further order 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." By para 5 of the same order liberty to apply was reserved to any party to apply on not less than 48 hours notice in writing. 2 In the course of his reasons for judgment, Gray J observed at para 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." 3 After referring to the judgment of North J in Australian Paper Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (1998) 81 IR 15, his Honour continued, at para 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." 4 The Full Court on appeal did not interfere with the substance of Gray J's interlocutory injunction. It did, however, note at paras 88 and 89 of its reasons: "Gray J granted an interlocutory injunction upon the conventional basis, that is, on the condition that the applicants gave the usual undertaking as to damages and upon the footing that the restraint would, unless discharged earlier, operate until the final hearing of the Unions' claims by the Judge to whom the matter had already been allocated for judicial case management and hearing (Kenny J). (His Honour had been approached to hear the claim for interim relief on an urgent basis in the vacation period.) In considering the balance of convenience, his Honour was faced with a difficult exercise in making a discretionary judgment as to the form of any interim restraint." 5 After referring to Mikasa (NSW) Pty Ltd v Festival Stores (1972) 127 CLR 617, Victorian Egg Marketing Board v Parkwood Eggs Pty Ltd (1978) 33 FLR 294 and Patrick Stevedores v MUA (1998) 195 CLR 1, the Full Court continued at paras 91 to 93: "It is true that the interim restraint granted will operate upon BHPIO's conduct of its business in substantial respects, and BHPIO claims that, if restrained absolutely from offering individual agreements, it will be prejudiced in its capacity to compete effectively with its business rivals. Moreover, it is also material to consider the position of third parties, in particular, those employees who may wish to accept BHPIO's offer but who will be deprived of that opportunity by virtue of the restraint imposed on BHPIO (see Patrick Stevedores Case at 41-43). It is appropriate to take these circumstances into account. Yet, as Bowen CJ pointed out in the above passage [from Victorian Egg Marketing Board v Parkwood Eggs Pty Ltd at 305 - 306], it may still be proper to restrain a person from doing something lawful, subject to the important proviso that the restraint operates for no more than a short period. In the present case, whilst we agree with the primary Judge in principle that the form of restraint ordered was appropriate, we cannot accept that its contemplated duration was proper. As noted, the restraint granted will, unless discharged earlier, subsist until the final hearing and determination of all the applicants' claims. Those claims are multiple and complex. They include claims for the imposition of penalties and for damages. They include claims made by way of group proceedings (joined in this action) on behalf of other employees, proceedings which have already given rise to adjectival complications. We were informed from the Bar table that, unless expedited, it may be twelve months before all of these claims are heard and determined. In our opinion, it would be wrong to allow the present interim restraint to remain in place for so long. We propose to require the applicants to apply to Kenny J for expedition of their claim for injunction under s 298M. We further propose to vary the restraint so that it operates until further order, rather than until the final hearing and determination of all of the applicants' claims." 6 The application to this Court was commenced on 21 January 2000. The expedited hearing of the application which the Full Court contemplated has been fixed to commence before Kenny J on 27 June 2000 and has an expected duration of three weeks. 7 Both before and after the Full Court judgment of 7 April, the applicant unions and BHPIO have engaged in negotiations with a view to resolving the dispute which has arisen from BHPIO's offer to its production workforce, and the acceptance by some of those employees, of individual workplace agreements. Those negotiations have been partly "without prejudice", but it seems to be common ground that they have been directed to a compromise of the litigation in this Court as well as to a resolution of the wider industrial dispute. 8 In November 1999, before the issue of the present proceedings, the applicant unions served notices on BHPIO under s 170MI of the Workplace Relations Act 1996 ("the Act"). n December 1999, the applicant unions gave BHPIO notice of industrial action pursuant to s 170MO of the Act and, pursuant to that notice, a 24 hour stoppage of work occurred at BHPIO's Newman and Port Headland operations on 13 December 1999. On 13 January 2000, the unions gave a further notice under s 170MO and a 4 day strike occurred at Newman from 6.00 pm on 17 January 2000 and at Port Headland from 6.00 pm on 19 January 2000. No industrial action was being engaged in when Gray J heard the unions' applications for interlocutory relief on 27 January 2000 and none has occurred since. 9 However, on 2 June 2000, the unions gave BHPIO a further notice under s 170MO of intention to take industrial action in the form of a 24 hour stoppage of work to commence at 6.00 am on 7 June and continuing with rolling stoppages thereafter until 16 June 2000. That prompted BHPIO to move, on 6 June 2000, for an order setting aside the orders of Gray J on 31 January 2000 as varied by the orders of the Full Court on 7 April. I entertained that motion late on 6 June 2000, effectively on an ex parte basis, although Mr Borenstein of Counsel for the applicant unions was present and made submissions opposing any form of interim relief. At the end of that hearing on 6 June, I ordered: "1. Upon the Respondent by its Counsel giving the usual undertaking as to damages, the First to Fifth Applicants be restrained until 4.15 pm eastern standard time on 8 June 2000 or further order from taking industrial action pursuant to the notices under Section 170MO of the Act which are comprised in exhibit "MAT1" to the Affidavit of Mark Anthony Troiani sworn this day. 2. That the First to Fifth Applicants take all practicable steps to bring the terms of this order as soon as possible to the notice of those employees of the Respondent who may have intended to participate in the industrial action defined in paragraph 1 of this order. 3. That the motion on notice dated 6 June 2000 be adjourned to 10.15 am eastern standard time on 8 June 2000. 4. That the Applicants file and serve by 5.00 pm on 7 June 2000 any affidavits or affidavits on which they intend to rely in opposition to the said motion on notice." 10 On the adjourned hearing of the motion, Counsel for BHPIO pressed for the continuation, until the hearing and determination of the application, of a restraint against industrial action in the following terms: "Further or alternatively, the first to fifth applicants, by themselves, their servants or agents, be restrained, until the hearing and determination of this proceeding or further order, from organising or engaging in industrial action against the respondent in support of a claim for, or in support of claims for terms and conditions to be included in, an industrial agreement between the first to fifth applicants or any of them and the respondent." Alternatively, it was sought that the interlocutory injunction presently restraining BHPIO from offering or entering into a workplace agreement with any of its employees be set aside. 11 Counsel for the unions opposed the grant of any interlocutory relief in either of the forms sought by BHPIO. It was contended that, subject to satisfying the requirements of Div 8 of Part VIB of the Act, protected action is legitimately open to either party to negotiations for a certified agreement and should not be foreclosed to the applicant unions in the present case. In support of that contention it was submitted that the existing interlocutory injunction had been granted against BHPIO to restrain conduct which both Gray J and the Full Court considered to be arguably in contravention of s 298M of the Act. The industrial action in which the unions would be restrained from engaging if my order of 6 June were continued was, on the other hand, indisputably protected or permitted by the Act. That much may be conceded but the proposed industrial action retains the character of a breach of contract by the employees who engage in it and the conduct of the unions in procuring it remains tortious. All that s 170MT does is to confer an immunity from suit, subject to certain exceptions, in respect of protected action whether taken by an employer or an employee. Similarly s 170MU confers on an employee immunity from dismissal, or, again subject to exceptions, from injury in his or her employment by reason of having taken protected action. 12 As I perceive it, the need for a restraint in some such terms as I formulated on 6 June arises, not from a concern to deny to the unions the opportunity to take action which is protected under the Act, but, rather, from the Court's interest in preserving the integrity of its own proceedings. The unions have obtained the protection of the Court's interlocutory order preserving, until the application can be prepared for trial, heard and determined, the full utility of the unions' claim for relief as available on 27 January this year. In those circumstances, it would be inequitable, I consider, for the unions to be allowed to take advantage of the parties', and the Court's, inability to achieve an immediate determination of the litigation by trying to achieve an extra-curial resolution of the dispute through industrial pressure while one of the weapons in the industrial armoury arguably available to the other party to the dispute is denied to that party by an order of the Court. 13 Mr Borenstein of Counsel for the unions sought to meet this consideration by pointing to the fact that Counsel for BHPIO before Gray J made the following submissions: "It is not insignificant of course, particularly in a context of the ability to take protected industrial action and freedom from suit for the industrial action that BHP can resist at least some of the industrial pressure by having people come to work who have signed agreements. The applicant's case is that even union members are prepared to come to work purely to protect its industrial action. That's not an insignificant benefit. At the moment the unions have embarked upon a course of conduct initiated by them of notifying bargaining periods, taking protected industrial action on a couple of episodes. They are doing that to bolster their industrial position. They're applying industrial leverage as they're entitled to do. BHP is entitled to resist. It's entitled within the framework of the Act to attempt to continue to conduct its operations, and it's obviously of relevance that it has employees who are prepared to come to work during periods of industrial action. Now, if inferences are to be drawn, they ought to be, your Honour, that if more people sign contracts, more people might be prepared to come to work, and that's why I said before that the Court is in a real sense being asked to take or to do something which will affect the balance in the industrial context. ........ Why should the industrial strength of the unions be maintained at the expense of BHP? This is not our evidence. This is the union's evidence. One of the complaints if that their effectiveness is being diminished. Their ability to take effective industrial action has been compromised, and this is being advanced to your Honour as a reason why the injunction should be granted. Well, these are matters which correspondingly affect BHP. Its ability to withstand industrial action might be compromised if the injunction is granted. In our respectful submission that fills powerfully against the balance of convenience. The effect of the application, if it's successful, your Honour, will be to tip the balance in the dynamics of an industrial context. Your Honour, can we add this about the balance of convenience. It would be very difficult in our submission if the case is lost ultimately for BHP or anyone who might sign in the meantime to recover the loss. BHP would not have been free from the restrictions that it complains of. It wouldn't have the efficiency and the capacity to resist strikes that it wants to have." 14 Having granted the injunction he did, Gray J, so Mr Borenstein contended, is to be taken to have rejected those submissions and to have exercised his discretion to allow the unions to take protected action as and when they thought fit until the hearing and determination of the application. I decline to impute that intention to his Honour. In my view, the submissions of Counsel for BHPIO, to which reference has been made were directed against the grant of any interlocutory relief at all. They were inapt to reflect an understanding that the unions, while pressing for interlocutory protection against BHPIO were reserving to themselves an unfettered right to take protected action as and when they saw fit. Such a reservation would have been a very important matter for his Honour to have weighed in the exercise of his discretion, particularly on the balance of convenience. Had he understood it to have been made, he would, of necessity have referred to it in his reasons. 15 Similar considerations militate against likewise regarding the orders of the Full Court as precluding the application for relief which BHPIO now makes. Mr Borenstein pointed to paragraph 40 of BHPIO's notice of appeal which was in these terms: "The Judge erred in exercise of his discretion in granting interlocutory relief in effectively assisting and coming to the aid of one party to an industrial contest at the expense and interests of the other party particularly where there were periods of protected action under the Act which the Respondents were entitled to invoke and were invoking." 16 It was said that the failure of BHPIO on the hearing of the appeal to press that ground of appeal signified an acceptance that the unions could continue to invoke protected action even if the injunction against BHPIO remained undisturbed. However, I consider para 40 to have been framed as a complaint, like that voiced by Mr Buchanan QC before Gray J, that his Honour's order inappropriately disturbed the status quo by precluding BHPIO from its chosen strategy even if there was no prospect of industrial action by the unions. In my view, the preferable inference from the whole history of the litigation as recounted above is that the unions, having engaged in protected action in December 1999 and January 2000 and having then sought the interlocutory protection of the Court, impliedly undertook to refrain from further industrial action, if they obtained that protection, for as long as it enured. I am reinforced in my preference for that inference by the consideration that if, contrary to it, the unions had sub silentio been reserving to themselves the right to take protected action as they saw fit, they would have been in breach of the duty of candour which equity imposes on an applicant for discretionary relief. 17 Further support for the inference which I prefer is afforded by the evidence of Mr Combet, the Secretary of the Australian Council of Trade Unions, who has had an active role in co-ordinating the activities of the unions concerned in the dispute with BHPIO. In an affidavit affirmed 7 June 2000 Mr Combet has deposed: "From February 2000 up until recently I was hopeful of negotiating a collective agreement with the company without resort to protected industrial action by the unions and their members. That is also the position of the Unions. Resort to protected industrial action was only considered when the parties reached an impasse in negotiations with the company in relation to the proposed collective agreement. That stalemate emerged in approximately late May." 18 For these necessarily abbreviated reasons, I have been persuaded that some modification of the existing interlocutory order should be made to accommodate the changed circumstances which have occurred since the order was made by Gray J and reviewed by the Full Court. Mr Borenstein, whilst opposing any such modification, submitted that an order in terms of para 1A of the amended motion set out at para 10 above should be made in preference to the dissolution of the injunction against BHPIO. Because the latter course would result in employees not parties to this litigation, who accept individual workplace agreements, acquiring vested rights as a result of action which might later be held to have contravened s 298M of the Act, I agree that it is preferable to impose a complementary interlocutory restraint on the unions. 19 It was contended by Mr Borenstein as a corollary to his principal submission that it remains open to BHPIO under s 170ML(3) of the Act in prosecuting its side of the dispute with the unions to take protected action by locking out "from their employment all or any of the employees whose employment will be subject to the agreement" on which the dispute has been focused. Although there is nothing to suggest that BHPIO has any intention of engaging in such a lockout, in deference to the principle of mutuality, I shall further amend the orders to impose a corresponding restraint on that form of industrial action by BHPIO. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. Associate: Dated: 8 June 2000 Counsel for the Applicant: Mr H Borenstein Solicitor for the Applicant: Maurice Blackburn Cashman Counsel for the Respondent: Dr C Jessup QC with Mr F Parry Solicitor for the Respondent: Mallesons Stephen Jaques Dates of Hearing: 6 and 8 June 2000 Date of Judgment: 8 June 2000