FEDERAL COURT OF AUSTRALIA Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy Information, Postal, Plumbing and Allied Services Union of Australia & Ors [2001] FCA 456 INDUSTRIAL LAW – Union threatens industrial action – whether threats made with intention to coerce the employer to enter into an enterprise agreement – whether intention that action be protected action is a defence – whether a union may initiate a bargaining period on behalf of employees who are not eligible to be members – whether union officers are personally liable Workplace Relations Act 1996 (Cth) ss 170NC(1), 170MI, 170MI(1)(c), 170MI(3)(a), 170MI(3)(e), 170ML(2)(d), 170MO, 170MO(1)(d), 170(2)(b) and Div 2 Pt VIB Quickenden v Commissioner O'Connor of the Australian Industrial Relations Commission [2001] FCA 303 - cited He Kaw Teh v The Queen (1985) 157 CLR 523 - discussed Giorgianni v The Queen (1984) 156 CLR 473 - discussed The Queen v Crabbe (1985) 156 CLR 464 - cited Cadbury Schweppes Pty Ltd v Australian Liquor Hospitality & Miscellaneous Workers' Union [2000] FCA 1793 - discussed Finance Sector Union of Australia v Commonwealth Bank of Australia [2000] FCA 1468 - applied National Union of Workers v Qenos [2001] FCA 178 - cited Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots [1991] 1 VR 637 - cited Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 100 FCR 530 - cited Root Control Technologies Pty Ltd v Root Quality Pty Ltd (2001) 177 ALR 231 - discussed Briginshaw v Briginshaw (1938) 60 CLR 336 – cited Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 – cited The Employment Advocate v National Union of Workers (2000) 100 FCR 454 - cited SEVEN NETWORK (OPERATIONS) LIMITED v COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY INFORMATION, POSTAL PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA ("CEPU") AND OTHERS V 631 OF 2000 JUDGE: MERKEL J DATE: 26 APRIL 2001 PLACE: MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 631 OF 2000 BETWEEN: SEVEN NETWORK (OPERATIONS) LIMITED APPLICANT AND: COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA ("CEPU") FIRST RESPONDENT DEAL J MIGHELL SECOND RESPONDENT ALEX McCALLUM THIRD RESPONDENT JUDGE: MERKEL J DATE OF ORDER: 26 APRIL 2001 WHERE MADE: MELBOURNE THE COURT ORDERS THAT the further hearing of the applicant's application for declaratory relief and penalties be adjourned to a date to be fixed. 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 631 OF 2000 BETWEEN: SEVEN NETWORK (OPERATIONS) LIMITED APPLICANT AND: COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA ("CEPU") FIRST RESPONDENT DEAL J MIGHELL SECOND RESPONDENT ALEX McCALLUM THIRD RESPONDENT JUDGE: MERKEL J DATE: 26 APRIL 2001 PLACE: MELBOURNE REASONS FOR JUDGMENT Introduction 1 The present matter concerns threats alleged to have been made by the respondents to take industrial action that would interfere with the televising by the applicant, Seven Network (Operations) Limited ("Seven Network"), of the Australian Football League finals ("the AFL finals"), the Brownlow Medal count and the Olympic Games in August and September 2000. 2 Seven Network claims that the threats contravened s 170NC(1) of the Workplace Relations Act 1996 (Cth) ("the Act") as they were made by the respondents with "intent to coerce" Seven Network: · not to agree to enter into a national certified agreement under the Act ("the national enterprise agreement") with the Media Entertainment Arts Alliance ("MEAA"), the Community and Public Sector Union ("CPSU") and the Communications, Electrical, Electronic, Energy Information, Postal, Plumbing and Allied Services Union of Australia ("CEPU"); · to agree to enter into a local certified agreement ("the local enterprise agreement") with the CEPU in respect of Seven Network's employees employed in Melbourne, including an agreement for a 5% wage increase during the period covering the AFL finals and the Olympics Games. 3 Seven Network seeks the imposition of penalties pursuant to s 170NF of the Act in respect of the alleged contraventions. 4 The CEPU, Dean Mighell, State Secretary of the CEPU (Electrical Division) ("Mighell") and Alex McCallum, a CEPU organiser ("McCallum") do not dispute that threats of industrial action were made, but claim that they did not act in contravention of s 170NC as at all material times they intended that the industrial action taken was to be protected action under the Act. 5 Seven Network also seeks a declaration that a notice of the CEPU, dated 11 August 2000, did not initiate a bargaining period for the negotiation of an agreement under Div 2 of Pt VIB of the Act in relation to employees of Seven Network. The respondents contend that the notice validly initiated a bargaining period under Div 2 of Pt VIB of the Act and dispute Seven Network's entitlement to the declaration it seeks. Background 6 Since January 2000 Seven Network, a national television network, has been endeavouring to negotiate a national enterprise agreement under the Act with the MEAA, the CPSU and the CEPU to cover all of Seven Network's employees in Australia. 7 Most of Seven Network's employees in Melbourne who were involved in televising sporting events were members of the MEAA. A number of those employees were dissatisfied with the manner in which the MEAA was proceeding with negotiating a new national enterprise agreement with Seven Network and approached the CEPU to negotiate a local enterprise agreement on their behalf. The CEPU claimed that it subsequently recruited up to 80 of Seven Network's Melbourne employees as "members" and appears to have become entitled to receive payment of approximately $300 as an annual "membership" fee from those persons. The individuals concerned were listed by the CEPU as members of the union on its register of members. 8 Under its rules, certified under s 207 of the Act, the CEPU is, in general, only able to admit as members persons engaged in occupations that fall within the electrical industry. Seven Network only employed one such person in Melbourne, an electrician, who played no role in the televising of sporting events. Thus, the CEPU only had one employee at Seven Network in Melbourne who was eligible to be a member of the union in accordance with its Rules. Evidence was given by Mighell and McCallum that it was arguable that some of the employees they recruited might have been eligible to be members of the union. However, it is fairly clear that they did not really believe that the individuals they recruited as "members" (camera operators, assistant operators, video editors and sound recordists) were eligible to be members of the CEPU. I am satisfied that Mighell and McCallum believed that only one electrician employed by Seven Network in Melbourne was eligible to be a member of the CEPU. Indeed, the CEPU's evidence was that it was the eligibility of that employee that enabled it to initiate a bargaining period under Div 2 of Pt VIB. 9 At the request of certain of the individuals recruited by the CEPU, the union became involved in negotiations for a certified agreement for Seven Network's Melbourne employees in November 1999. Mighell, acting as State Secretary of the CEPU, advised and assisted about 30 Seven Network employees employed in the Melbourne News Department to give individual notices under Div 2 of Pt VIB of the Act initiating bargaining periods; to give individual notices of intention to take industrial action under s 170MO of the Act; and to take industrial action against Seven Network in accordance with the notices. The CEPU represented to Seven Network that the employees concerned were members of the CEPU and Seven Network invited the CEPU to represent those employees in negotiating a resolution of the industrial dispute. After that particular dispute was resolved, albeit temporarily, Seven Network commenced negotiations for a national enterprise agreement with the MEAA, the CPSU and the CEPU. The CEPU continued to claim that it was representing its "members" employed by Seven Network in enterprise agreement negotiations with Seven Network. 10 During July 2000 the CEPU tabled a proposed local enterprise agreement but Seven Network informed the CEPU that it wanted to negotiate a national, and not a local, enterprise agreement. On 10 August 2000 Seven Network received a notice, pursuant to s 170MI of the Act, of initiation of a bargaining period for a certified agreement under Div 2 of Pt VIB from the CEPU dated 9 August 2000. The notice, relevantly, stated: "the employees subject to the proposed agreement are those persons who are members or who are eligible to be members of the CEPU engaged in classifications covered by the relevant award (Metal Engineering and Associated Industries Award)" 11 After the 9 August notice was sent the respondents realised it referred to the wrong award. Consequently, the CEPU substituted a second notice of initiation of bargaining period dated 11 August 2000 which was received by Seven Network on 18 August 2000. The 11 August notice differed from the 9 August notice in that it made no reference to whether the employees were eligible to be members of the CEPU, stated that the proposed agreement was to relate only to Seven Network's business in Victoria and that: "the employees subject to the proposed agreement are those persons employed by [Seven Network] and all subsidiary companies" 12 Between about 14 August and 21 August 2000 threats of possible industrial action were made by Mighell and McCallum in a number of media interviews. In substance, the threats related to the disruption of Seven Network's coverage of the AFL finals, including the Grand Final and the Olympic Games. It was not in dispute that any relevant conduct of Mighell and McCallum was conduct of the CEPU and that the statements made in the media interviews, which were authorised by the CEPU, were made with the intention of bringing "pressure" on Seven Network to accede to the CEPU's claim for a local enterprise agreement. The timing of the statements is significant. The period in which industrial action was being considered was the most important period for live coverage by Seven Network in the history of its business. 13 Seven Network responded by seeking undertakings from the CEPU that no industrial action would be taken by its members. The CEPU refused to give those undertakings. 14 By 18 August Seven Network had received legal advice that many of the employees who the CEPU was representing, and was claiming were its members, were not eligible to be members of the CEPU and that the industrial action threatened by the CEPU on behalf of those employees would not be protected action under the Act. A letter to that effect was immediately sent by Seven Network to Mighell, although Mighell claims he did not see the letter until several days later. 15 On 21 August 2000 the CEPU sent Seven Network a notice of intention to take industrial action pursuant to s 170MO of the Act. The notice, relevantly, stated: "NOTICE IS HEREBY GIVEN that officers and employees of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and members of the CEPU employed by you intend to organise and engaged [sic] in industrial action in accordance with the provisions applying to 'protected action' set out in the Workplace Relations Act 1996. The particulars of this notice are as follows: Commencing Friday August 25, 2000. 1. Rolling stoppages in the News Operations, Outside Broadcasts and Studio Operations for a period of one month or until agreement is reached (if agreement is reached prior to expiration of one month.)" 16 The notice was signed by Mighell as State Secretary of the CEPU and was accompanied by a s 170MR notice, also signed by Mighell as State Secretary, stating, inter alia, that the members of the CEPU have been authorised to engage in industrial action "in accordance with the registered rules of the CEPU". Although the notice stated that the members "intended" to engage in industrial actions, Mighell's evidence was that he and McCallum doubted that any such action would be taken by the employees who would not wish to "tarnish their own product". 17 On 23 August 2000, after the CEPU refused to give undertakings not to take industrial action and Mighell and McCallum had continued to threaten such action in statements to the media, Seven Network applied to the Court for an injunction to restrain the respondents from threatening to take or taking industrial action. The hearing of the application for an interlocutory injunction was set down for 24 August 2001 but, before the hearing began on that day, Seven Network was notified that the CEPU wholly withdrew the notice of intended industrial action dated 21 August 2000. 18 Although the threatened industrial action was not taken by the CEPU or any of Seven Network's employees, Seven Network proceeded with its application for the imposition of penalties for contraventions of s 170NC and for declaratory relief in relation to the notice of the CEPU initiating a bargaining period. The Act 19 Section 170NC provides: "(1) A person must not: (a) take or threaten to take any industrial action or other action; or (b) refrain or threaten to refrain from taking any action; with intent to coerce another person to agree, or not to agree, to: (c) making, varying or terminating, or extending the nominal expiry date of, an agreement under Division 2 or 3; or (d) approving any of the things mentioned in paragraph (c). (2) Subsection (1) does not apply to action, or industrial action, that is protected action (within the meaning of Division 8)." 20 Protected industrial action can only be taken during a bargaining period initiated in accordance with the requirements of s 170MI. Section 170MI provides: "(1) If: (a) an employer; or (b) an organisation of employees; or (c) an employee acting on his or her own behalf and on behalf of other employees; wants to negotiate an agreement under Division 2 or 3 in relation to employees who are employed in a single business or a part of a single business, the employer, organisation or employee (the initiating party) may initiate a period (the bargaining period) for negotiating the proposed agreement. (2) The bargaining period is initiated by the initiating party giving written notice to each other negotiating party (see subsection (3)) and to the Commission stating that the initiating party intends to try: (a) to make an agreement with the other negotiating parties under Division 2 or 3; and (b) to have any agreement so made certified under Division 4. (3) In this Division, each of the following is a negotiating party to a proposed agreement: (a) the initiating party; (b) if the initiating party is an employer who intends to try to make an agreement under section 170LJ or 170LL or Division 3--the organisation or organisations who are proposed to be bound by the agreement; (c) if the initiating party is an employer who intends to try to make an agreement under section 170LK--the employees at the time whose employment will be subject to the agreement; (d) if the initiating party is an organisation of employees--the employer who is proposed to be bound by the agreement; (e) if the initiating party is an employee acting on his or her own behalf and on behalf of other employees--the employer who is proposed to be bound by the agreement and the employees whose employment will be subject to the agreement." 21 Section 170MK provides for the bargaining period to begin at the end of 7 days after a notice under s 170MI was given. 22 Section 170ML, which is within Div 8, provides: "(1) This section identifies certain action (protected action) to which the provisions in section 170MT (which confers certain legal immunity on protected action) are to apply. (2) During the bargaining period: (a) an organisation of employees that is a negotiating party; or (b) a member of such an organisation who is employed by the employer; or (c) an officer or employee of such an organisation acting in that capacity; or (d) an employee who is a negotiating party; is entitled, for the purpose of; (e) supporting or advancing claims made in respect of the proposed agreement; or (f) responding to a lockout by the employer of employees whose employment will be subject to the agreement; to organise or engage in industrial action directly against the employer and, if the organisation, member, officer or employee does so, the organising of, or engaging in, that industrial action is protected action." 23 Section 170MO provides: "(1) Any action taken as mentioned in subsection 170ML(2) by: (a) an organisation of employees; or (b) a member of such an organisation; or (c) an officer or employee of such an organisation acting in that capacity; or (d) an employee who is a negotiating party; is not protected action unless the requirements set out in subsection (2) are met. (2) The requirements are that: (a) if the action is in response to, and is taken after the start of, a lockout of employees by the employer in respect of the proposed agreement – the organisation, or the employee who is a negotiating party, has given the employer written notice of the intention to take the action; or (b) in any other case – the organisation, or the employee who is a negotiating party, has given the employer at least 3 working days' written notice of the intention to take the action. … (5) A written notice or other notification under this section must state the nature of the intended action and the day when it will begin. (6) A written notice or other notification under this section may be given before the start of the bargaining period." 24 In the present case the CEPU's notice dated 11 August 2000 initiated a bargaining period for an agreement under Div 2 of Pt VIB, which applies to constitutional corporations and is founded upon the corporations, rather than the conciliation and arbitration, power in s 51 of the Constitution: see Quickenden v Commissioner O'Connor of the Australian Industrial Relations Commission [2001] FCA 303 at [40]. 25 Section 170LJ, which is in Div 2 of Pt VIB, provides: "(1) The employer may make the agreement with one or more organisations of employees where, when the agreement is made, each organisation: (a) has at least one member employed in the single business or part whose employment will be subject to the agreement; and (b) is entitled to represent the industrial interests of the member in relation to work that will be subject to the agreement. (2) The agreement must be approved by a valid majority of the persons employed at the time whose employment will be subject to the agreement." 26 Section 170ND provides that s 170NC is a penalty provision. Section 170NF provides that a contravention of a penalty provision is not an offence but an eligible court (which, under s 170NE, includes the Federal Court) may impose a penalty of up to $10,000 for a body corporate and up to $2,000 in all other cases. 27 It is not in dispute that the notices under ss 170MI and 170ML given by the individual employees of Seven Network in November and December 1999 were valid notices, as they were given by individual employees acting on their own behalf who were therefore negotiating parties entitled to take protected action under the Act: see ss 170MI(1)(c), 170MI(3)(e), 170ML(2)(d), 170MO(1)(d) and 170MO(2)(b). 28 The procedure adopted in November and December 1999 created problems for the CEPU. First, it was cumbersome and onerous for the CEPU to organise the requisite notices to be given by all of the individual employees. Second, as the protected action that could be taken under the Act pursuant to the notices could only be organised and taken by the individual employees, the CEPU, which wished to organise and take action on the employees' behalf, had no statutory function under that procedure. 29 Consequently, in August 2000 the CEPU determined that it was appropriate for it to give the requisite notices under ss 170MI and 170ML on behalf the employees who had been recruited as members. There was a problem with that procedure. Although the CEPU was entitled to initiate a bargaining period for an agreement under Div 2 of Pt VIB if it had at least one member employed or whose employment would be subject to the agreement (ss 170MI(1)(b) and 170LJ(1)(a)) and was entitled as a negotiating party to give a notice of industrial action (ss 170MI(3)(a) and 170MO(2)(b)) it was not entitled to take any effective protected industrial action, other than through employees who were members of the CEPU. Although protected action can be taken by an organisation as a negotiating party, if the industrial action involves bans or stoppages by employees at a specific workplace that action can only be taken by members of the organisation that is a negotiating party or by employees who are negotiating parties (ss 170MO(1)(b) and (1)(d)). As the notice under s 170ML was given by the CEPU, and not by Seven Network's employees, the CEPU was only able to threaten the industrial action set out in its notice if that action was intended to be taken by its members. As the CEPU did not have any members who were able to take such action, the action threatened was not capable of being taken as protected action. Section 170NC 30 The question in the present case is whether the threats of industrial action were made with intent to coerce Seven Network not to agree to enter into a national enterprise agreement but, rather, to enter into a local enterprise agreement under Div 2 of Pt VIB of the Act. There is no real dispute that the CEPU threatened industrial action with the intent to induce Seven Network to enter into a local, rather than a national, enterprise agreement. However, the respondents contend that there was no intention to "coerce" in breach of s 170NC(1) as at all times their intention was that employees at Seven Network would take industrial action that is protected action under the Act. Mighell and McCallum stated that they believed that, as the CEPU initiated the bargaining period, the action threatened by it was protected action. 31 Although the respondents do not dispute that the action threatened, if taken, would not have been protected action under the Act, they claim that s 170NC(1) was not contravened by them because their intent and belief, albeit wrong, was that the action they threatened was protected action. The respondents' contention requires consideration of the meaning of the phrase "intent to coerce" in s170NC(1). 32 It is well established that a person intends to commit a crime or an offence where it is that person's aim or purpose to bring about its constituent elements. In He Kaw Teh v The Queen (1985) 157 CLR 523 at 569-570, in discussing the difference between general or basic intent (which relates to the doing of the act involved in an offence) and special or specific intent (which relates to the results caused by the act done), Brennan J stated: "In statutory offences, general or basic intent is an intent to do an act of the character prescribed by the statute creating the offence; special or specific intent is an intent to cause the results to which the intent is expressed to relate. Both general and specific intent may be established by knowledge: the former by knowledge of the circumstances which give the act its character, the latter by knowledge of the probability of the occurrence of the result to which the intent is expressed to relate." 33 Section 170NC is a statutory offence based on an intent to "coerce", that is, to do an act of the character prescribed by the section. Thus, the requisite intent is established by knowledge of the circumstances which give the act in question its coercive character, rather than knowledge of the probability of the result. 34 In Giorgianni v The Queen (1984) 156 CLR 473 ("Giorgianni") Wilson, Deane and Dawson JJ, in discussing the element of intent in the offences of aiding and abetting and counselling and procuring, stated: "Intent is an ingredient of the offence of aiding and abetting or counselling and procuring and knowledge of the essential facts of the principal offence is necessary before there can be intent. It is actual knowledge which is required and the law does not presume knowledge or impute it to an accused person where possession of knowledge is necessary for the formation of a criminal intent. Secondly, although it may be a proper inference from the fact that a person has deliberately abstained from making an inquiry about some matter that he knew of it and, perhaps, that he refrained from inquiry so that he could deny knowledge, it is nevertheless actual knowledge which must be proved and not knowledge which is imputed or presumed. (at 504-505) … [certain] offences require intentional participation in a crime by lending assistance or encouragement. They do not, of course, require knowledge of the law and it is necessary to distinguish between knowledge of or belief in the existence of facts which constitute a criminal offence and knowledge or belief that those facts are made a criminal offence under the law. The necessary intent is absent if the person alleged to be a secondary participant does not know or believe that what he is assisting or encouraging is something which goes to make up the facts which constitute the commission of the relevant criminal offence. He need not recognize the criminal offence as such, but his participation must be intentionally aimed at the commission of the acts which constitute it. It is not sufficient if his knowledge or belief extends only to the possibility or even probability that the acts which he is assisting or encouraging are such, whether he realizes it or not, as to constitute the factual ingredients of a crime. If that were sufficient, a person might be guilty of aiding, abetting, counselling or procuring the commission of an offence which formed no part of his design. Intent is required and it is an intent which must be based upon knowledge or belief of the necessary facts." (at 506-507) 35 Similarly, the intent required for the purposes of s 170NC relates to actual knowledge of the circumstances that made the conduct in question coercive conduct. For the reasons stated in Giorgianni, if the person in question had such knowledge, that person will not escape liability by establishing that he or she believed that the conduct was lawful. I would add that my view of s 170NC is consistent with its purpose of proscribing conduct, other than protected action, which is intended to prevent "free bargaining": see Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 100 FCR 530 ("Hanley") at [44]. 36 Further, while actual knowledge is necessary, where a person deliberately refrains from making inquiries because that person knew the probable consequences of the inquiries, then constructive knowledge of those consequences may be regarded as equivalent to actual knowledge of the consequences: see The Queen v Crabbe (1985) 156 CLR 464 at 471 and Criminal Law by Peter Gillies 4th Ed at 70-72. 37 Accordingly, subject to the qualification in respect of wilful blindness, intent for the purposes of s 170NC(1) requires that the person have actual knowledge of the circumstances that make that person's conduct coercive. 38 The meaning of coercion in the context of s 170NC(1) has been considered in a number of recent cases. In Cadbury Schweppes Pty Ltd v Australian Liquor Hospitality & Miscellaneous Workers' Union [2000] FCA 1793 ("Cadbury Schweppes") at [19] Finkelstein J suggested that coercion in an industrial context usually involves the exertion of illegitimate economic pressure that induces the other party to act. 39 In Finance Sector Union of Australia v Commonwealth Bank of Australia [2000] FCA 1468 ("Finance Sector Union") Gyles J at [18]-[38] concluded that for the purposes of s 170NC(1) coercion requires conduct that is: · compulsive in the sense that the pressure brought to bear, in a practical sense, negates choice; and is · unlawful, illegitimate or unconscionable. 40 More recently, in National Union of Workers v Qenos [2001] FCA 178 ("Qenos") at [128] Weinberg J stated that the analysis of the term "coerce" by Gyles J in Finance Sector Union was compelling and correctly stated the reach of s 170NC(1). 41 The above cases establish that there must be two elements to prove "intent to coerce" under s 170NC(1). First, it needs to be shown that it was intended that pressure be exerted which, in a practical sense, will negate choice. Second, the exertion of the pressure must involve conduct that is unlawful, illegitimate or unconscionable. The requirement that the pressure exerted be unlawful, illegitimate or unconscionable must be considered in the context of the scheme of the Act and of the fact that, subject to the immunity in respect of protected industrial action under s 170MT of the Act, many forms of industrial action are unlawful: see Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots [1991] 1 VR 637. 42 The requirement of unlawfulness etc might, in a sense, be said to have been superimposed upon the ordinary meaning of "coercion": cf Hanley at [11]. However, without such a requirement s 170NC(1) could have an anomalous operation in so far as it might prevent the legitimate exercise of rights by employees or employers. In Hanley the Full Court did not really consider this issue. In all the circumstances I consider that it is appropriate to apply the approach taken to s 170NC(1) in Cadbury Schweppes, Finance Sector Union and Qenos unless I am satisfied that that approach is clearly wrong, which I am not. 43 It follows from the foregoing discussion that Seven Network must establish that: (a) the respondents' threats of industrial action were made with intent to negate Seven Network's choice by the exertion of pressure that was, in the circumstances, unlawful, illegitimate or unconscionable; and (b) the respondents had actual knowledge of the circumstances that made their conduct coercive in the sense discussed in (a) above. 44 Where it is contended that the action threatened or taken is protected action the operation of s 170N(2) must be considered. Section 170NC(2) does not provide that sub-section (1) does not apply to action that is intended to be protected action. Rather, it provides that the sub-section does not apply to action that is protected action. Thus, if the action relied upon to establish a breach of s 170NC(1) is protected action then the taking of that action cannot amount to a breach of s 170NC(1). If the conduct relied upon is a threat to take action that is protected action the reason why the threat may not breach the section will be because the making of the threat to take protected action, for example by the giving of notice under s 170MO, does not have the element of unlawfulness, illegitimacy or unconscionability required to establish a breach of s 170NC(1). In that regard it may be relevant that the only threat of protected industrial action that is provided for under the Act is the giving of notice under s 170MO. Accordingly, it does not follow that threats of such action made outside of the statutory scheme (eg a "softening up" process) can be made with impunity. In determining whether the requisite elements of s 170NC(1) are established all of the circumstances of the case must be considered. 45 The final legal issue that requires consideration relates to the circumstances in which action by an organisation can also be considered to be action of the individual taking the action on the organisation's behalf. The issue of personal liability of a union organiser and of the union for the same conduct in respect of a breach of s 170NC(1) arose in Hanley. The Full Court held at [85] that the apparent authority of the union organiser to engage in unlawful conduct was sufficient to make the union vicariously liable for the organiser's breach of s 170NC(1), either under the section itself or by reason of the operation of s 349 of the Act. 46 In the present case it is not disputed that the conduct of the individuals is that of the CEPU. Rather, the issue is whether Mighell and McCallum are personally liable for the conduct they engaged in on behalf of the Union. The issue of when a tortious act of a corporation can also constitute a tortious act of the director acting on behalf of the corporation was considered by Finkelstein J in Root Control Technologies Pty Ltd v Root Quality Pty Ltd (2001) 177 ALR 231. His Honour, after reviewing the authorities, concluded at [146]: "All that can be said confidently is that if a director decides that his company should carry out an act that results in an infringement of the rights of a third party, the director does not, without more, render himself personally liable at the suit of the third party . . . . The Director's conduct must be such that it can be said of him that he was so personally involved in the commission of the unlawful act that it is just that he should be rendered liable. If a director deliberately takes steps to procure the commission of an act which the director knows is unlawful and procures that act for the purpose of causing injury to a third party, then plainly it is just that liability should be imposed upon him. Lesser conduct may suffice. For example, if the director is recklessly indifferent as regards whether his company's act was unlawful and would cause harm, that may also suffice. In the end it will depend upon the facts of each particular case. Where the boundary lies, between the non-tortious conduct of a director who acts bona fide within the course of his authority and the tortious conduct of a director who acts deliberately and maliciously to cause harm, cannot be stated with any precision." 47 In the context of the Act, where a s 170MO notice is given on behalf of an organisation by an authorised officer in accordance with the Act, without more, that act would appear to be the act of the organisation alone. However, the officer can be personally liable for the giving of the notice if there is "more". Thus, if the notice is improperly given, the officer who gave the notice might be personally liable for giving it notwithstanding that the officer was acting within the scope of his or her authority. 48 Finally, it is common ground that, as s 170NC creates an offence that gives rise to the imposition of a penalty, it is appropriate to apply the Briginshaw standard of proof: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 at [200]-[201] and The Employment Advocate v National Union of Workers (2000) 100 FCR 454 at [25]-[29]. Findings 49 The statements made by Mighell and McCallum which were relied upon by Seven Network as constituting threats to take action for the purposes of s 170NC(1) were as follows. 1. On or about 14 August 2000 Mighell made statements to a journalist from The Age (which were reported in The Age newspaper on 15 August 2000) to the following effect: (a) 'His members' (being Seven Network's Melbourne employees) had been 'treated disgracefully' by Seven Network; (b) '…our members' wages and conditions are our number one concern and whether that effects the telecast of the finals or the Olympics, then so be it'; and (c) A strategic Grand Final boycott could prevent the game from going to air." 2. On or about 14 August 2000, McCallum made statements to a journalist from The Age (which were thereafter reported in The Age newspaper on 15 August 2000) to the following effect: (a) The CEPU would have agreed to the undertaking [not to take industrial action] in return for a 5% pay increase for its members during the 2000 AFL final series and the Olympics period, but that this offer had been refused; (b) 'The CEPU want our members to get a decent rate of pay after years of poor treatment'; and (c) 'Seven has yet to reach any form of enterprise agreement with its employees. We're not going to give away our bargaining rights on the promise of more talks because we've been talking since last year.' 3. On or about 15 August 2000 McCallum made statements to a journalist from The Australian (which were thereafter reported in The Australian newspaper on 16 August 2000) to the following effect: (a) Cameramen, sound engineers and technicians, being the Seven Network's Melbourne employees had 'had it to death' with management and were serious about disrupting the AFL's final series, the Grand Final and the Olympic broadcast unless some concessions were made; and (b) Channel 7 Melbourne management had been stalling on negotiations for a pay claim of 6% a year plus a new classification structure. 4. On or about 19 August 2000 McCallum made statements to a Sunday Herald Sun newspaper journalist (which were reported in the Sunday Herald Sun newspaper on 20 August 2000) to the following effect: (a) The CEPU was in a position to take industrial action; (b) The CEPU had to get a proper industrial agreement with Channel 7 for its members to work under. 5. On 21 August 2000 Mighell made statements on radio station 3AW (Neil Mitchell talkback), broadcasting in the Melbourne metropolitan region as follows: Neil Mitchell: 'Well, do you claim that you have the power to have any impact on the finals coverage or the Olympics?' Mighell: 'I don't…well, I don't claim it, but I do think that if our members were to take industrial action, should they choose to do it, they would have an impact, yes.' Neil Mitchell: 'What sort of impact?' Mighell: 'Well I think they could stop the coverage of finals footy if they wanted to. And I'm not saying that they do. I think the workers at Seven are very proud of what they do, they don't want to taint their product. I think that's probably the last thing they'd really want to do.' Neil Mitchell: 'Well, is …well, okay, are you saying there's really not a possibility of industrial action then around the Olympics or the finals?' Mighell: 'I couldn't rule it [industrial action around the Olympics of the finals] out, Neil. Obviously we will play our cards close to our chests and it is a tactical situation with Seven I suppose that we are in. But, I can't rule it out, but that is a decision our members would take and they wouldn't take it lightly.' Okay Neil Mitchell: 'How many members do you have there?' Mighell: 'About eighty members there now.'" Later in the interview Mighell said "sometimes you have to put the shoulder to the wheel and actually threaten to take industrial action, otherwise you get nowhere". 6. By notice in writing dated 21 August 2000 signed by Mighell, the CEPU gave notice to Seven Network that Seven Network's Melbourne employees who were members of the CEPU intended to organise and engage in industrial action, being rolling stoppages in the news operations, outside broadcast and studio operations undertaken by Seven Network Melbourne as and from 25 August 2000, for a period of one month or until agreement was reached. 7. By notice in writing dated 21 August 2000 Mighell authorised the employees of Seven Network in Melbourne, who purported to be members of the CEPU, to engage in industrial action against Seven Network. 50 The media statements made by Mighell and McCallum caused Seven Network to place advertisements in the Herald Sun and The Age newspapers on Saturday, 19 August 2000 responding to "inflammatory statements" which "included a threat to disrupt coverage of the AFL Grand Final". 51 The respondents claimed that, although the media statements raised the possibility of industrial action, they fell short of a threat to take industrial action. In the context of s 170NC(1) a threat means to menace, or forewarn of an intention to take, industrial, or other, action. While the statements made by Mighell and McCallum did not state explicitly that industrial action was intended to be taken, I am in no doubt that the implicit warning in all the circumstances, including the continuing refusal of the CEPU to undertake not to take industrial action, was that if Seven Network continued to refuse to accede to the CEPU's demands, such action would be, or was likely to be, taken. Accordingly, I am satisfied that in the media interviews both Mighell and McCallum threatened to take industrial action against Seven Network. The fact that the threat was conditional does not make it any less a threat. Obviously, the s 170MO notice signed by Mighell constituted an additional threat of an intention to take industrial action. 52 The threats were plainly intended to bring pressure to bear on Seven Network to accede to the CEPU's demands for a local enterprise agreement: cf Hanley at [41]. 53 The main issue of fact raised by the respondents is whether the threats fell outside the purview of s 170NC(1) as they were intended to be threats to take protected action. If the respondents did not actually possess the belief they claimed the question of whether the belief could afford them a defence would not arise. 54 Mighell and McCallum are experienced union officials who were aware of the importance of membership eligibility rules. Mighell has been State Secretary since 1995, an organiser from 1988 to 1995 and has a "working knowledge" of the Act. McCallum has been an organiser since 1995. Mighell and McCallum were aware that, under the CEPU Rules, there was a real problem about the eligibility of Seven Network employees recruited by them. They each claimed that the CEPU was entitled to initiate a bargaining period because it had one employee who was eligible to be a member of the CEPU, but they also claimed that the employees' right to freedom of association and the rights of the CEPU to bargain on their behalf under Div 2 of Pt VIB entitled the CEPU to admit and list the employees as members and to act on their behalf in that capacity in enterprise negotiations with Seven Network. As explained earlier, Mighell and McCallum were aware that only one employee, an electrician, was eligible to be a member of the CEPU. Although they may have been entitled to represent the persons they recruited for the purposes of Div 2 of Pt VIB, I am satisfied that they did not believe that those persons were entitled to be members of the CEPU under its Rules. 55 Mighell and McCallum also claimed that they believed that, as the CEPU was entitled to initiate a bargaining period for Seven Network employees, it was also entitled to give a notice of protected action which enabled those employees to take action that was protected action under the Act. Mighell stated that advice he received on 19 or 20 August 2000 from Benfell, a senior industrial officer of the CEPU, confirmed his belief that the CEPU was entitled to take protected action, but when he received legal advice to the contrary for the first time from the CEPU's solicitor on 23 August 2000 he immediately withdrew the s 170MO notice. 56 The claim by Mighell and McCallum that they intended that the action threatened was to be protected action under the Act and that they received advice from Benfell to that effect is difficult to accept. The complex requirements of the Act in respect of the taking of protected action by individual employees had been strictly adhered to by Mighell and McCallum in respect of the industrial action taken by Seven Network employees in November/December 1999. It is most unlikely that Mighell and McCallum would not have been aware of the requirements of the Act concerning the taking of protected industrial action in relation to the AFL finals and the Olympic Games after the CEPU, rather than the employees, initiated the bargaining process in August 2000. Benfell, Mighell, and McCallum were aware that the statutory procedures that were required to be followed for action to be protected were complex; that they were breaking new ground in endeavouring to initiate a bargaining period with only one eligible member at Seven Network and in threatening industrial action for the benefit of employees who were ineligible to be members of the CEPU; and that they were undertaking a high risk strategy in making threats to disrupt the televising of the AFL finals and the Olympic Games. In the circumstances, I do not accept that Benfell, Mighell or McCallum believed that non-members of the CEPU who were not negotiating parties were entitled to take protected action without carefully considering or receiving legal advice concerning the protected action provisions of the Act, which they say they did not do. Certain evidence given by Mighell is consistent with that conclusion. Mighell said that he didn't have "industrial muscle or membership" to achieve the disruption threatened. He also said that he was aware of "how little ability" the CEPU had to do anything at the time and that he was aware of "how flawed our game plan was at the time". 57 Although I do not go so far as to find that Benfell, Mighell and McCallum knew that the industrial action threatened was not capable of being protected action, I am satisfied they did not have a belief that the action was protected action. The probability is that the employees represented by the CEPU did not intend to disrupt the television coverage of the AFL Finals or the Olympic Games and that Mighell and McCallum, being aware of the absence of any such intention but having recruited those employees as members, felt obliged to make threats of such action in an endeavour to pressure Seven Network to accept, at the least, some of the CEPU's demands. As Mighell and McCallum were aware that it was most unlikely that the industrial action threatened was going to be taken, they did not believe that it was critical to the CEPU's strategy that the action be protected action. That belief assists in explaining the failure of Benfell, Mighell and, to a lesser extent, McCallum to more carefully consider the rights of the CEPU under the Act. 58 Mighell and McCallum stated that they had been advised by Benfell of the CEPU's entitlement to take protected action. In one sense the advice was correct as the CEPU, as a negotiating party, was entitled to take protected action as an organisation. However, such action was of no utility as the CEPU was unable to take any action that would affect Seven Network telecasts. I do not accept that Benfell advised Mighell or McCallum that employees of Seven Network, who were not eligible to be members of the CEPU and who Benfell knew were not negotiating parties, were entitled to take protected industrial action. I am satisfied that Benfell would not have given such advice in the circumstances of the present case without seeking legal advice on that issue, which he did not do. 59 In the above circumstances there can be little doubt that the conduct of Mighell and McCallum on behalf of the CEPU was coercive conduct. In summary, I am satisfied, on the probabilities, that the following factors constituted coercive conduct of the CEPU for the purposes of s 170NC(1): (a) The CEPU recruited as members Seven Network employees who had the power to interfere with or interrupt the televising of the AFL finals and the Olympic Games but who were not eligible to be members of the union; (b) The CEPU misrepresented to Seven Network that it had up to 80 members employed at Seven Network, including members who had the power to interfere with or interrupt the televising of the AFL finals and the Olympic Games; (c) The misrepresentations were made for the purpose of bringing pressure to bear on Seven Network to accede to the CEPU's demands for a local enterprise agreement for Seven Network's Melbourne employees; (d) At all material times, but unbeknown to Seven Network, the CEPU had only one person, an electrician, who was employed at Seven Network in Melbourne who was eligible to be or was a member of the CEPU and that person had no power or capacity to interfere with or interrupt the televising of the AFL finals and the Olympic Games; (e) The Seven Network employees represented by the CEPU did not form an intent to take industrial action to interfere with or interrupt the televising of the AFL finals or the Olympic Games; (f) Notwithstanding the above matters, in order to bring pressure to bear on Seven Network, the CEPU made media statements implying that industrial action would be, or was likely to be, taken by Seven Network's employees to interfere with and interrupt the televising of the AFL finals and the Olympic Games if the CEPU's demands were not acceded to; (g) On 18 August 2000 the CEPU gave notice to Seven Network under s 170MO of the Act of the intention of its "members" to take industrial action; (h) At the time the s 170MO notice was given the CEPU had no members who had the power or capacity to take the industrial action threatened and the persons it had been representing that had that power or capacity (ie the persons the CEPU recruited as members), did not have an intention at that time to take the action threatened; (i) If the action threatened had been taken by Seven Network's employees (who were not members of the CEPU) that action would not have been protected action under the Act and would therefore have been unlawful; (j) The CEPU did not hold a positive belief that the action threatened was protected industrial action; rather, the CEPU believed that the action threatened may not be protected action but refrained from making any proper enquiry concerning that matter; (k) The conduct engaged in by the CEPU was intended to negate Seven Network's choice in favour of a national, rather than a local, enterprise agreement and to obtain Seven Network's agreement to provide the benefits the CEPU was seeking to gain for Seven Network employees it had recruited as "members" under a local enterprise agreement. 60 The conduct engaged in by the CEPU constituted a threat to take industrial action with intent to coerce Seven Network not to agree to a national enterprise agreement but, rather, to agree to the local enterprise agreement sought by the CEPU. The conduct was coercive as it was a threat to take action that, in all the circumstances, was unlawful, illegitimate or unconscionable. The CEPU, through its officers Mighell and McCallum, was aware of all the circumstances set out in paras (a)-(h), (j) and (k) above that made the threat unlawful, illegitimate or unconscionable. 61 Mighell was actively involved in the conduct set out in sub-paras (a)-(h), (j) and (k) and was personally aware of the matters set out in those sub-paragraphs. Mighell's conduct in relation to the threats he made was such that the threats I have found constituted a breach of s 170NC(1) by the CEPU also constitute a breach by Mighell. 62 McCallum's role as an organiser was secondary to that of Mighell. However, I have found that McCallum's media interviews also constituted threats of industrial action against Seven Network. When McCallum made those threats he was aware of the matters set out in sub-paras (a), (d), (e), (j) and (k). Thus, although McCallum was not a signatory or party to the s 170MO notice, I am satisfied that the threats made by McCallum also breached s 170NC(1). McCallum's secondary role is relevant to penalty but not to breach. Div 2 Pt VIB – The Corporations power 63 Finally, Seven Network claims that the s 170MI notices of the CEPU are invalid as the CEPU had no power under the Act to negotiate an enterprise agreement on behalf of persons who were not eligible to be members of the CEPU. Accordingly, so it is argued, the CEPU's notice of its intention to negotiate a local enterprise agreement on behalf of members of the MEAA who were not eligible to be members of the CEPU was invalid. 64 The argument fails to recognise the fundamental change brought about by the federal parliament's reliance upon the corporations power as the source of its legislative power to enact Div 2 of Pt VIB. 65 Section 170MI(1) authorises a union to initiate a bargaining period if it "wants to negotiate an agreement under Division 2…in relation to employees who are employed in a single business or a part of a single business…". Under Div 2 an employer which is a constitutional corporation may make an agreement with an organisation of employees if, when the agreement is made, the organisation has at least one member whose employment will be subject to the agreement and the organisation is entitled to represent the industrial interests of the member in relation to work that will be subject to the agreement: see ss 170LH, 170LI and 170LJ. 66 Seven Network appeared to accept that on a literal interpretation of s 170LJ the CEPU was entitled to give the s 170MI notice dated 11 August 2000. However, it argued that the "scheme of the Act" only enabled industrial organisations to represent the industrial interests of their members and not the industrial interests of members or persons only eligible to be members of other organisations. Thus, so it is said, I ought to infer an implicit limitation on ss 170LH, 170LI and 170LJ to the effect that: · the employees the subject of the agreement referred to in those sections are persons who are members or eligible to be members of the organisation wanting to negotiate the agreement; · the agreement is confined in its operation to employees who are members or eligible to be members of the organisation or is otherwise shown to be in the industrial interests of those persons. 67 Although the Act, in general, provides for industrial organisations to represent the industrial interests of persons who are members or are eligible to be members of those organisations, that is not so in Div 2 of Pt VIB. The clear intent of Divs 2 and 8 is that an organisation with at least one member (whose interests it is entitled to represent) employed in a business of a constitutional corporation is entitled to initiate a bargaining period in order to negotiate a certified agreement in relation to the employment of that, and other, employees of the corporation. The agreement must be approved by a valid majority of employees (s 170LJ(2)). Further, where the organisation, rather than the employees, is the relevant negotiating party, only it or its members employed by the corporation can take protected action in relation to the agreement (ss 170ML(2) and 170MO(2)). I do not regard the operation of these provisions as anomalous or otherwise inconsistent with the objects or scheme of the Act. 68 In my view Seven Network's argument concerning the operation of Div 2 Pt VIB is contrary to the ordinary and natural meaning of the words used. Further, it seeks to read into ss 170LI and 170LJ words that are not warranted and are inconsistent with the clear legislative objective of giving the Division a wider and different operation to other parts of the statutory scheme that are founded on the conciliation and arbitration power and are concerned with the traditional role of industrial organisations in that process. 69 For the above reasons the Seven Network has not established an entitlement to declaratory relief in respect of the CEPU notices given under s 170MI. Conclusion 70 I am satisfied that the CEPU, Mighell and McCallum have contravened s 170NC(1) of the Act. In these reasons for judgment I have considered the allegations made against each of those respondents on the basis of a single breach being alleged against each of them. However, Seven Network in its written submissions contended that each threat upon which it relied should be regarded as a separate breach. That issue was not addressed in any detail by the parties. In these circumstances it is appropriate to adjourn the further hearing of the matter to enable submissions to be made in respect of that issue and penalty. As Seven Network has not made out its claim for the declaratory relief it sought in respect of the s 170MI notices, when the final orders are made it will be appropriate to dismiss its application for such relief. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel. Associate: Dated: 26 April 2001 Counsel for the Applicant: Mr JL Bourke Solicitor for the Applicant: Clayton Utz Counsel for the Respondent: Mr RM Niall Solicitor for the Respondent: Electrical Trade Union Date of Hearing: 13 March 2001 and 10 April 2001 Date of Judgment: 26 April 2001