FEDERAL COURT OF AUSTRALIA Geelong Wool Combing Ltd v Textile, Clothing and Footwear Union of Australia [2003] FCA 773 INDUSTRIAL LAW – industrial action – picket – interlocutory injunction – conduct of picketers – intent to coerce employer to agree to making a certified agreement PRACTICE AND PROCEDURE – representative order – whether available – whether members of proposed class have common interest Federal Court Rules O 6 r 13 Workplace Relations Act 1996 (Cth) ss 166A, 170NC, 170NF, 170NG Amos Removals & Storage Pty Ltd v Small [1981] 2 NSWLR 525 applied Auspine Ltd v Construction, Forestry, Mining and Energy Union (2000) 97 IR 444 doubted Australian Workers Union v Yallourn Energy Pty Ltd (2000) 95 IR 207 doubted Cadbury Schweppes Pty Ltd v Australian Liquor, Hospitality and Miscellaneous Workers' Union (2000) 106 FCR 148 discussed Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398 applied Electricity Commission of New South Wales v Arrow (unreported, Supreme Court of New South Wales, Hodgson J, 7 December 1990) applied Geddes v Australasian Meat Industry Employees' Union (1917) 17 SR (NSW) 119 applied Commonwealth of Australia and Australian Telecommunications Commission v John Doyle, Graham Brian Honner and Tamie Marie Van Hoof (unreported, Supreme Court of Victoria, Brooking J, 4 October 1983) cited Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 100 FCR 530 considered London Association for Protection of Trade v Greenlands Limited [1916] 2 AC 15 applied Maritime Union of Australia v Patrick Stevedores Operations Pty Ltd [1998] 4 VR 143 cited News Group Newspapers Ltd v SOGAT '82 [1986] IRLR 337 applied Prudential Assurance Co Ltd v Newman Industries Ltd [1981] Ch 229 applied United Kingdom Nirex Ltd v Barton (unreported, Queen's Bench Division, Henry J, 13 October 1986) applied GEELONG WOOL COMBING LIMITED v TEXTILE, CLOTHING AND FOOTWEAR UNION OF AUSTRALIA & ORS V 559 of 2003 FINKELSTEIN J 22 JULY 2003 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 559 of 2003 BETWEEN: GEELONG WOOL COMBING LIMITED Applicant AND: TEXTILE, CLOTHING AND FOOTWEAR UNION OF AUSTRALIA (Which is sued on its own behalf and, pursuant to Rule 13 of Order 6 of the Federal Court Rules, as representing all persons who were prior to 11 May 2003 employed by the Applicant and whose employment was regulated by the Geelong Wool Combing Ltd – TCFUA Certified Agreement 2001, and who were on 11 May 2003 or are now, or have at any time since 11 May 2003 been present at the picket line or picket camp (howsoever called) at the Applicant's premises on the area bounded by Broderick Road, Heales Road, Hendy Street and the Outer Proposed Freeway in Corio, in the state of Victoria ("the Site")) AND OTHERS ACCORDING TO THE ATTACHED SCHEDULE Respondents JUDGE: FINKELSTEIN J DATE OF ORDER: 22 JULY 2003 WHERE MADE: MELBOURNE UPON THE APPLICANT by its Counsel undertaking: (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 the interlocutory order made hereunder 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 COURT ORDERS THAT: 1. Until the trial of the proceeding or further order, each of the fourth, sixth, seventh, ninth, tenth, eleventh and thirteenth respondents be and he hereby is restrained from:- (a) physically obstructing or physically impeding the free movement of goods or people to and from the property occupied by the Applicant which is within the area bounded by Broderick Road, Heales Road, Hendy Street and the Outer Proposed Freeway in Corio, in the state of Victoria ("the Site"); (b) abusing, threatening, harassing or intimidating any person, entering or leaving the Site; (c) trespassing on the Site; or (d) throwing or firing or otherwise discharging any projectiles at or into the Site. 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 559 of 2003 BETWEEN: GEELONG WOOL COMBING LIMITED Applicant AND: TEXTILE, CLOTHING AND FOOTWEAR UNION OF AUSTRALIA (Which is sued on its own behalf and, pursuant to Rule 13 of Order 6 of the Federal Court Rules, as representing all persons who were prior to 11 May 2003 employed by the Applicant and whose employment was regulated by the Geelong Wool Combing Ltd – TCFUA Certified Agreement 2001, and who were on 11 May 2003 or are now, or have at any time since 11 May 2003 been present at the picket line or picket camp (howsoever called) at the Applicant's premises on the area bounded by Broderick Road, Heales Road, Hendy Street and the Outer Proposed Freeway in Corio, in the state of Victoria ("the Site")) AND OTHERS ACCORDING TO THE ATTACHED SCHEDULE Respondents JUDGE: FINKELSTEIN J DATE: 22 JULY 2003 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 Section 170NC of the Workplace Relations Act 1996 (Cth) has given rise to many cases in which judges have attempted to define its precise scope of operation. The section prohibits action (as well as inaction), taken "with intent to coerce another person to agree, or not to agree, to" make, vary, terminate or extend the nominal expiry date of a certified agreement. A contravention of s 170NC is not an offence, but because s 170NC is a "penalty provision", it may give rise to the imposition of a penalty not exceeding $2,000, or $10,000 if the offender is a body corporate (s 170NF(2)) and the grant of an injunction to prevent any further contravention (s 170NG). This case raises old problems and introduces a new one. The new problem concerns the manner in which a proceeding may be taken against a large group, all of the members of which are not necessarily in breach of s 170NC. 2 A convenient place to begin is with the facts. As I am dealing with an application for interlocutory relief I will assume as true the facts alleged by the applicant, Geelong Wool Combing Limited. I note, however, that many of them are disputed by the respondents. It is also worth mentioning that the respondents have themselves raised facts upon which I will rely, largely because they seem to be uncontroversial. 3 The applicant, which has its operations in Corio, processes wool (from scouring to finishing gilling) on a commission basis for its customers, who are local wool-traders and exporters. The site where the works are located is bounded by Broderick Road, Heales Road, Hendy Street and the proposed Geelong outer freeway. Access is at two points; the main gate on Broderick Road and a rear gate on Heales Road. The applicant conducts its operations twenty-four hours per day, seven days per week. It employs approximately 115 workers at the site, 93 of whom are described as "non-management employees". The employees work twelve hour shifts. There are four shifts and each employee is allotted to one of them. The terms and conditions of employment of the non-management employees are found in a certified agreement styled "Geelong Wool Combing Limited – TCFUA Certified Agreement 2001" which came into force on 23 April 2001 with a nominal expiry date of 31 December 2002. 4 In September 2002, negotiations commenced for a new certified agreement. Those involved in the negotiations included representatives of the applicant, officers of the Textile, Clothing and Footwear Union of Australia, which is the first respondent, and a number of employees. The negotiations did not progress very far. There is no need to detail the points upon which the parties were unable to reach agreement. But to put the case into perspective it is at least helpful to explain the main sticking point. Under the existing certified agreement the employees receive a "package" rate of pay; that is a rate which includes a component that recognises the fact that each employee works a roster of four consecutive 12 hour days, four consecutive days off, four consecutive 12 hour nights and finally four consecutive days off. The "package" rate includes the relevant penalties and allowances which are averaged and paid fortnightly. The applicant wishes to reduce its employees' hours of work and change the rosters and shift patterns when appropriate. It also wishes to "unbundle" the "package" pay rate. The immediate effect of "unbundling" would be to reduce the average pay packet of an employee by about 25 per cent. Not surprisingly, the employees will not go along with this proposal. 5 To press its point, and in an attempt to force the negotiations to a conclusion, the applicant took a number of steps. First, on 19 December 2002 it lodged with the Australian Industrial Relations Commission an application under s 170MH to terminate a number of old certified agreements. That application was a precursor to a further s 170MH application that the current certified agreement be terminated. There is a view that if a certified agreement is terminated under s 170MH the immediately preceding certified agreement which it had replaced would be reinstated or revived and so on until one runs out of agreements. The second step was taken before the hearing of the s 170MH application. The applicant decided to lock-out its employees and purported to stand them down as at 28 April 2003. The applicant concedes that the purpose of the lock-out was to put pressure on the union to accept its proposal. 6 Naturally the union and the employees were bound to respond. In the first place they organised a picket (which they describe as a protest) outside the Corio site. This seems to have been a relatively orderly affair. Then the union sought an interim injunction restraining the lock-out on the basis that it was not preceded by a proper notice under s 170MO with the consequence that it was not "protected action" for the purposes of s 170MT. The union obtained its injunction on 5 May 2003, whereupon the applicant took back the employees and the picket disappeared. 7 The union's success was short-lived. Within a few days a second lock-out notice was served and the employees were locked-out again. They have not been at work since 11 May 2003. Immediately following the lock-out the union and the employees reinstated the picket. The picketers anticipated that they would be there for the long haul. So the union arranged for a caravan, a portable toilet, a generator and other useful items to be brought to the site of the picket, in effect setting up a camp. Many of the locked-out employees (according to some estimates, up to 80 per cent) attend the picket on what seems to be an informal roster basis. 8 So far so good. The establishment of the picket was the natural and, no doubt, anticipated reaction to the lock-out. Moreover, provided the picketers properly behaved themselves they were acting within their right to protest their employer's action. But situations like this do have a habit of getting out of control. According to the applicant, this is precisely what has occurred. 9 Mr Karounos is a manager with the applicant and has responsibility for industrial relations. He has sworn three affidavits dealing with the situation at the site. The first affidavit takes matters to the end of the June 2003. The second affidavit picks up from there and describes what has been occurring in July. It is possible that the first affidavit was prepared some weeks ago in anticipation of an application of the present kind (the details of which I will describe in a moment) being made but for some reason the application was deferred. Mr Karounos describes the events in some detail. Other affidavits confirm his evidence. I need do no more than briefly summarise the evidence. According to Mr Karounos, a number of picketers are engaging in illegal conduct. They are abusing and threatening staff and contractors entering and exiting the site. Their language is both vulgar and highly offensive. They have been following some employees and contractors off the site, throwing projectiles at some and spitting on others. On at least one occasion, three men with balaclavas threatened to kill or hospitalise two security guards. This intimidation and harassment (for that is what it is) is causing extreme anxiety to the victims. Employees are afraid to go to work. Others have organised car pools so they do not travel alone. There are also instances of damage being caused to the applicant's property, in particular to a gatehouse, security lights, security cameras, locks, chains and so on. Marbles, sinkers, nuts, rocks and stones have been thrown. The applicant estimates that repairs will cost around $15,000. Of particular seriousness is the scattering of highly dangerous bale hooks and tacks on the entrance driveway with the object of shutting down the entrance to traffic. 10 I have sufficiently covered the facts. I can now deal with the orders that are sought. There are two. The first is an order under O 6 rule 13 of the Federal Court Rules that the union represent "all persons who were prior to 11 May 2003 employed by the Applicant and whose employment was regulated by the [2001 certified agreement], and who were on 11 May 2003 or are now, or have at any time since 11 May 2003 been present at the picket line". The second order sought is in the form of an injunction. The applicant's preferred order is that the union and the represented parties be restrained from being within 500 metres of either the Broderick Road entrance or the Heales Road entrance to its site. In the alternative, the applicant asks that the union and those that it is ordered to represent be restrained from engaging in particular forms of conduct such as: physically obstructing or impeding free movement of goods or people to and from the site; abusing, threatening besetting, harassing or intimidating any person entering or leaving the site; and other similar relief. If a representative order is refused the applicant seeks injunctions as I have described them, but against the named respondents. 11 I will deal first with the application for a representative order. Order 6 rule 13 permits such an order to be made "where numerous persons have the same interest in any proceeding". The circumstances in which a representative order may be made are not settled. Various requirements have been imposed. For example, in Amos Removals & Storage Pty Ltd v Small [1981] 2 NSWLR 525 Hunt J said the requirements were threefold: first, that the persons to be represented form an identifiable class; second, that the person selected as representative must be shown to be in the management of the class; and third, that those who are selected as being represented must have a common interest or a community of interest with all the other members. The position was put slightly differently in Prudential Assurance Co Ltd v Newman Industries Ltd [1981] Ch 229. The question in that case concerned the appropriateness of a representative order on the plaintiff's side. Vinelott J said (at 254-255) that three conditions had to be satisfied to make such an order. The first condition was that the order would not confer a right of action on the members of the class represented who would not otherwise have been able to assert such a right in a separate proceeding or allow a bar to a defence which might otherwise have been available to the respondent in such a separate action. The second condition was the common interest requirement and where every member of the class has a separate cause of action, it is necessary for there to be a common ingredient in the cause of action of each member of the class. The third condition was that the order must be for the benefit of the class that the plaintiff be permitted to sue in a representative capacity. 12 As I have said, this proceeding is brought to recover pecuniary penalties against each respondent (the union and a number of the picketers), and also to obtain permanent injunctions against each respondent. To succeed in the action the applicant must establish that each respondent has engaged in unlawful (and therefore coercive) conduct with the intention of forcing the applicant to agree to a certified agreement in the form which the respondents seek. The evidence to date does not suggest that all the members of the putative represented class are engaged in a common enterprise, or are acting with a common purpose. Indeed, the evidence such as it is, is to the contrary effect. It seems to be clear that some picketers, perhaps a large number, are not engaging in any unlawful conduct at all. That, of itself, is a sufficient reason to deny to the applicant the order it seeks. There is, however, a more fundamental problem. This is, after all, a penalty proceeding. The applicant must establish that each respondent has contravened the section. This will involve an examination of the individual conduct of each respondent, as well as an enquiry as to the reason for that conduct. Then, if the applicant shows that a contravention has occurred, there is the question of relief. The amount of penalty to be imposed on each unsuccessful respondent will require separate consideration. In those circumstances it seems to me to be clear beyond any doubt that this action cannot be defended by one respondent acting on behalf of a group. The reason why a representative order cannot be made is that the putative group has no community of interest in the relevant sense, though each of them has a similar interest, namely to successfully defend the proceeding. But, of course, that is not a basis for making a representative order. 13 In reaching the above conclusion I have relied upon the following cases: London Association for Protection of Trade v Greenlands Limited [1916] 2 AC 15; Geddes v Australasian Meat Industry Employees' Union (1917) 17 SR (NSW) 119; Amos Removals & Storage Pty Ltd v Small; Commonwealth of Australia and Australian Telecommunications Commission v John Doyle, Graham Brian Honner and Tamie Marie Van Hoof (unreported, Supreme Court of Victoria, Brooking J, 4 October 1983); United Kingdom Nirex Ltd v Barton (unreported, Queen's Bench Division, Henry J, 13 October 1986); News Group Newspapers Ltd v SOGAT '82 [1986] IRLR 337; Electricity Commission of New South Wales v Arrow (unreported, Supreme Court of New South Wales, Hodgson J, 7 December 1990); Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398; Maritime Union of Australia v Patrick Stevedores Operations Pty Ltd [1998] 4 VR 143. 14 The next question is whether the applicant has made out a prima facie case for relief against the individual respondents. On this point I should make it quite clear that there is no justification for the illegal conduct about which complaint is made. I would enjoin that conduct without a moment's hesitation if the applicant demonstrates at least some prospects of success. The authorities refer to the use of an injunction for the purpose of maintaining the status quo, or maintaining the state of affairs which is, on the balance of convenience, appropriate to be maintained until the trial. There will be situations in which an applicant cannot be expected to be granted an injunction unless he can prove positively the existence of his rights and the infringement of them. There will be other situations in which, though the applicant's proof of his rights or the infringement of them is not strong, an injunction will be granted because to withhold it would do the applicant irreparable harm, while to grant it would not greatly injure the respondent. 15 I should point out here that the applicant does not bring a claim in trespass, nuisance or for the so-called "economic" torts. If it were able to maintain claims of that character, it would not fail to obtain some kind of interlocutory relief against those respondents who are engaging in unlawful conduct. The applicant does not maintain any such claim because it believes that it would be barred by s 166A(1). That section provides, in substance, that a person may not bring an action in tort against an organisation of employees, or an officer, member or employee of such an organisation in relation to conduct by the organisation or by those persons in contemplation of furtherance of claims that are the subject of industrial action. The restriction does not apply to certain exempt conduct, including conduct that results in personal injury, or wilful or reckless destruction of, or damage to, property: s 166A(2). The premise upon which it is believed that s 166A operates in this case is that the respondents are acting in their capacity as officers, members or employees (as the case may be) of the union. I do not query the premise. I must say, however, that the basis for it is not self-evident having regard to the facts. 16 Be that as it may, the applicant's case is founded solely on s 170NC. It must establish that each respondent (1) is engaging in unlawful (and therefore coercive) conduct; (2) with the intent of forcing the applicant to make a certified agreement. I will put to one side for the moment whether the evidence establishes that each respondent is engaging in unlawful conduct. On the question of intent I am presently satisfied that the event which immediately triggered the picket, and perhaps also the illegal conduct by some of the picketers, was the lock-out. On one view, therefore, the intent which can be attributed to the picketers is an intent to coerce the applicant to take back its workforce. That, however, is not the only possible conclusion. There are cases which have held that this type of reactive conduct is just part and parcel of, and connected with, an attack on the employer's bargaining position. In Australian Workers Union v Yallourn Energy Pty Ltd (2000) 95 IR 207 Merkel J took this approach. He said that there was a "degree of unreality" about a submission that one could attribute a different intention to individual actions engaged in during the course of an industrial dispute. Merkel J was of the view that every action, including the action of picketing, is intended to advance the respective bargaining positions of the parties in relation to the new enterprise agreement that is being negotiated. That is to say, the fact that the immediate event (for example a lock-out) has triggered certain conduct (say a picket) does not admit of the conclusion that the purpose of the picket is outside the bargaining process. The point was summarised by Mansfield J in Auspine Ltd v Construction, Forestry, Mining and Energy Union (2000) 97 IR 444, 453 in the following way: "The underlying circumstance is the process of negotiation with a view to achieving an enterprise agreement, and each of the steps in that process of negotiation, whether protected action … or otherwise, is a step taking some form of action which had as its ultimate purpose the intent to procure an enterprise agreement upon terms acceptable to the persons or entities taking that step". Mansfield J said that it would "add an air of unreality to the proper operation of s 170NC if the Court were to look only to the immediate step which preceded the picketing to see whether the intent of those taking that step of picketing was to coerce another person to agree to making an enterprise agreement, or if the Court was obliged only to identify the immediate preceding step in the negotiating process without regard to the ongoing process of negotiations." 17 In Cadbury Schweppes Pty Ltd v Australian Liquor, Hospitality and Miscellaneous Workers' Union (2000) 106 FCR 148 I expressed disquiet about this line of reasoning. Having given the matter further consideration I am convinced that the approach taken by both Merkel J and Mansfield J is an oversimplification of the problem. One reason, so it seems to me, why the approach taken by those judges is questionable is that they analyse the issue of intent (a question of fact) on a group basis and not, as the statute requires, on an individual basis. In reality, different people have different reasons for taking similar action, even if they are acting as a group. A simple example will suffice to make the point. The evidence tells us that the employees have been out of a job, and therefore without pay, for some months. This will cause many of them to suffer extreme hardship. Indeed, that is the purpose of the lock-out. I have been told that one or two employees have been forced to sell their homes because they have been unable to keep up their mortgage payments. I do not know whether these employees are among those who are engaging in unlawful conduct. Let it be assumed that they are. Is it not possible, one could say likely, that their conduct is the result of the extremely difficult position in which they now find themselves? Is it not reasonable to infer that these people are motivated by simple anger towards, perhaps even hatred of, the applicant and have no present intent as regards the conclusion of a certified agreement? To say the answer must be in the negative is, in my view, going too far. 18 There is another way of looking at the matter. The cases say that where a person's conduct is motivated by a number of factors, the intent required by s 170NC is the person's principal or predominant intent. In Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 100 FCR 530 the Full Court made the following observations about s 170NC (at 541): [Section 170NC] is found in Pt VIB of the Act which establishes a detailed regime for the creation of certified agreements including procedures for their negotiation, execution and certification. That regime contemplates free bargaining between employers and their employees or organisations of employees and allows the parties to undertake industrial action within a framework created by that Part. It is consistent with the purposes of Pt VIB to treat s 170NC as proscribing conduct which might result in an agreement which is not the product of free bargaining. That result could as well be achieved by conduct which had as only one of a number of objectives the coercion of a person as by conduct which had that as its sole objective. Section 170NC is contravened if a person engages in conduct intending to coerce a person to agree to make an EBA [enterprise bargaining agreement] even if the conduct has one or several other purposes or objectives. It is, to adopt the language of General Motors Holden Pty Ltd v Bowling (1976) 51 ALJR 235, sufficient that the proscribed reason is a substantial or operative reason." In my view, even if the illegal conduct occurs in the context of an industrial dispute, it does not automatically follow that the conduct is principally motivated by the wish to have the other person make a certified agreement, although it may be a subsidiary or incidental purpose. The point is that the purpose for which conduct is engaged in must be determined as a discrete matter of fact in each case. General rules about group, or even individual, behaviour will rarely elucidate the correct answer. The specific facts must be examined. And in that regard there is really nothing inherently startling about the proposition that individual action may be motivated by something other than the hope that an industrial dispute will be resolved in a particular way. 19 What then is the situation in this case? Although the position is extremely tenuous, in the sense that the applicant may well fail at trial, its assertion that those respondents who are engaging in illegal conduct are motivated by a proscribed intent cannot be dismissed as frivolous. Put another way, the applicant has demonstrated that there is an issue to go to trial, although its case is weak. Once it has established the existence of a triable issue, that is sufficient in the special facts of this case to warrant the grant of interlocutory relief. 20 The applicant is not entitled to relief against all respondents. The eight and twelfth respondents have not been served with the process and no relief is sought against them. The applicant does ask for injunctions against the union, but there is no evidence that the union has any involvement in the illegal conduct. That one or two shop stewards have been seen engaging in unlawful conduct does not make a case against the union. The actions of these people cannot be attributed to the union. There is no evidence that the second, third or fifth respondents have engaged in any illegal conduct. No orders will be made against them. On the other hand, there is sufficient evidence against the remaining respondents to warrant orders being made. I will not require them to move away from the entrance to the applicant's site. They can conduct a peaceable protest there if they like. I will, however, ensure that their conduct will be peaceable by making orders that until trial they be restrained from: (1) physically obstructing or physically impeding the free movement of goods or people to and from the applicant's site; (2) abusing, threatening, harassing or intimidating any person entering or leaving the site; (3) trespassing on the site; and (4) throwing or firing or otherwise discharging any projectiles at or into the site. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. Associate: Dated: 25 July 2003 Counsel for the Applicant: Mr S Wood Solicitor for the Applicant: Freehills Counsel for the Respondents: Ms R Doyle Solicitor for the Respondents: Slater & Gordon Date of Hearing: 18 and 22 July 2003 Date of Judgment: 22 July 2003 Schedule of Parties Geelong Wool Combing Limited Applicant Textile, Clothing and Footwear Union of Australia First Respondent Michele O'Neil Second Respondent Jenny Kruschel Third Respondent Glenn Musgrove Fourth Respondent David Hobbs Fifth Respondent Tony Turner Sixth Respondent Russell Welsh Seventh Respondent Peter Aitken Eighth Respondent Warrick Sadler Ninth Respondent Marshall Jennings Tenth Respondent Adam Gibbe Eleventh Respondent Glenn Heap Twelfth Respondent Colin Bartz Thirteenth Respondent