FEDERAL COURT OF AUSTRALIA Broad Construction Services (WA) Pty Ltd v The Construction, Forestry, Mining and Energy Union of Workers [2005] FCA 613 Trade Practices – threatened strike - secondary boycott – interim injunction INDUSTRIAL LAW – protected action F H Transport Pty Ltd v Transport and General Workers Union (1997) 75 FCR 480 Workplace Relations Act 1996 (Cth), s 170 Trade Practices Act 1974 (Cth), ss 45D, 45DD, 80, 82 Broad Construction Services (WA) Pty Ltd v The Construction, Forestry, Mining and Energy Union of Workers WAD 101 of 2005 SIOPIS J 9 MAY 2005 (Date of Order) 13 MAY 2005 (Publication of Reasons) PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 101 OF 2005 BETWEEN: BROAD CONSTRUCTION SERVICES (WA) PTY LTD APPLICANT AND: THE CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION OF WORKERS RESPONDENT JUDGE: SIOPIS J DATE OF ORDER: 9 MAY 2005 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. Until 5 pm on 16 May 2005 or further order, the Respondent, its officers, employees, members or agents or otherwise howsoever be restrained from: (a) engaging in industrial action [as that term is defined in the Workplace Relations Act 1996 (Cth)] with employees working on the Swanview Re‑development Site in Como ("the Site"); and/or (b) directing and or causing, instructing, demanding or requesting that the employees working on the Site engage in such action. 2. By 5 pm on 10 May 2005 the Applicant apply for the matter to be listed before the Australian Industrial Relations Commission. 3. The Respondent to file and serve any affidavits by Friday, 13 May 2005 at 4 pm. 4. The matter be adjourned for further hearing to 10 am on 16 May 2005. 5. Costs be in the cause. Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 101 OF 2005 BETWEEN: BROAD CONSTRUCTION SERVICES (WA) PTY LTD APPLICANT AND: THE CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION OF WORKERS RESPONDENT JUDGE: SIOPIS J DATE OF ORDER 9 MAY 2005 PUBLICATION OF REASONS: 13 MAY 2005 PLACE: PERTH REASONS FOR JUDGMENT 1 This is an application for an interlocutory injunction. The applicant seeks to restrain the respondent, its officers, employees, members or agents from engaging in industrial action as that term is defined in the Workplace Relations Act 1996 (Cth) with employees working at the site of Swanview Re‑development building works at Como and counselling or procuring any person from engaging in that activity. 2 The applicant is a wholly owned subsidiary of a company, Broad Construction Services Pty Ltd ('Broad'). Broad is party to a construction contract for the building of an apartment complex at the Swanview Re‑development site in Como ('the Como site'). The applicant has contracted with the proprietor to carry out the contract works under that contract on the same terms as set out in the head contract. The applicant had engaged subcontractors to provide services at that site for the purpose of carrying out the contract works. The applicant does not itself have any employees who carry out construction work. The respondent is a registered trade union. 3 On 5 May 2005, the respondent sent a notice of authorisation to take industrial action to the applicant. The notice read as follows: 'NOTICE OF THE GIVING OF AUTHORISATION TO ENGAGE IN INDUSTRIAL ACTION … Under paragraph 170MR(1)(c) notice is hereby given to the registrar that members of the CFMEU have been authorised to engage in industrial action within the bargaining period against Broad Construction Services (WA) Pty Ltd. The industrial action will take place at the Swanview Apartments Project Como and will consist of: 1. A complete cessation of work by all employees, commencing at 6.30 am, Tuesday, 10 May 2005 until 6.30 am, Thursday, 12 May 2005; and 2. A complete cessation of work by all employees, commencing Monday, 16 May 2005 at 6.30 am until Wednesday, 18 May 2005 at 6.30 am; and 3. Commencing every second Monday thereafter at 6.30 am a complete cessation of work for 48 hours.' 4 In response to that notice, on 9 May 2005 the applicant filed a substantive application for relief under sections 80 and 82 of the Trade Practices Act 1974 (Cth) founded on a threatened breach of section 45D of the Trade Practices Act by the respondent. Among the relief sought by the applicant was a permanent injunction and damages. At the same time the applicant also filed the application for the interlocutory injunction referred to above. 5 The application for the interlocutory injunction was heard on an urgent basis after 4 pm on Monday, 9 May 2005. In support of the application for the interlocutory injunction, the applicant relied upon an affidavit of Mr Kari Rummukainen sworn on 6 May 2005. As the application was served at short notice on the respondent, the respondent was not able within the time constraints to file an affidavit in response to the affidavit of Mr Rummukainen. However, the respondent was represented at the hearing by Counsel. 6 At the conclusion of the hearing I granted an interim injunction restraining the respondent from engaging in industrial action at the Como site for 7 days and made directions that the applicant refer the dispute to the Australian Industrial Relations Commission. I also made further directions for the hearing of the application. I said that I would publish short reasons later. These are the reasons. Background 7 Broad has employees engaged in construction work and is party to an industrial agreement with the Construction, Forestry, Mining and Energy Union of Workers ('the WA Union'), which was referred to in the hearing as the State 'emanation' of the Respondent. The industrial agreement was registered with the Western Australian Industrial Relations Commission on 7 May 2003. The applicant, because it has no workers carrying on construction work, is not party to any industrial agreement under the Industrial Relations Act 1979 (WA) ('the State Act') or a certified agreement under the Workplace Relations Act 1996 (Cth). 8 On 4 April 2005 Mr Rummukainen on behalf of Broad wrote to the WA Union giving notice that Broad was terminating an agreement whereby it contributed funds to a Construction Skills and Training Centre associated with that Union. On 18 April 2005 Mr Rummukainen was advised that a 48 hour strike had been called by the WA Union at the Como site. On 19 April 2005 Mr Rummukainen learned that the WA Union had called a 48 hour strike at another of the sites where Broad was carrying out building works, namely, the Mount Lawley Senior High School site. 9 On 26 April 2005, Broad commenced Supreme Court proceedings against the WA Union wherein it sought injunctive relief against the union and two of its officials as a consequence of the strike action being undertaken at the construction sites referred to above. 10 On 27 April 2005, Broad received a Notice of Initiation of Bargaining Period from the respondent. The accompanying letter stated that the Notice was issued in accordance with section 170MI(2) of the Workplace Relations Act 1996 (Cth). The Notice said that the respondent intended to try and make a certified agreement with Broad under Part VIB of the Workplace Relations Act. The Notice also provided certain particulars of the matters to be dealt with in the proposed agreement. 11 On the following day, the applicant also received a Notice to similar effect. The respondent also served Notices to similar effect on each of the subcontractors that was operating at the Como site. 12 Mr Rummukainen deposed that the receipt of the Notice to Initiate a Bargaining Period was the first indication he had received of a desire by the respondent to negotiate a Certified Agreement. Prior to that time he understood from conversations with the WA Union officials that the WA Union wanted to negotiate a new industrial agreement under the State Act. 13 On 3 May 2005, the officers of the applicant attended a conciliation conference before the Australian Industrial Relations Commission. The dispute was not resolved at the conference. 14 On 5 May 2005, an official of the respondent held a meeting of employees working on the site where he directed them to go on strike 'against Broad'. Also on 5 May 2005, the applicant received from the respondent the Notice of authorisation to undertake industrial action which I have referred to above. 15 Further, by a facsimile transmission marked as having been sent at 9.34 am on 5 May 2005, the respondent sent a letter to Com‑al Windows Pty Ltd a subcontractor operating on the Como site, which said: 'Bargaining Period 05/1030 As you would be aware the CFMEU has pursuant to the provisions of the Workplace Relations Act 1996 initiated a bargaining period against Com‑al Windows Pty Ltd ('the Company') with the aim of securing a Federal Certified Agreement with the Company in respect of its operations in Western Australia. There are no current certified agreements that apply in respect of the Company's operations in Western Australia. … On that basis, we invite the Company to hold negotiations in good faith with the CFMEU on the terms of a Certified Agreement to apply in respect of its operations in Western Australia. Accordingly, we would appreciate it if you would contact Joe McDonald by close of business Friday, 6 May 2005 to arrange a suitable time for a meeting to be convened to enable the parties to hold negotiations. In the event that we do not receive a response to this correspondence by the date specified, we will assume that the Company is not prepared to hold negotiations with the CFMEU for a Certified Agreement to apply as outlined.' 16 However, without waiting for the time period referred to in this letter to expire, the respondent by a facsimile communication marked as having been sent at 16.48 pm on Thursday, 5 May 2005, sent to the Manager of Com‑al Windows Pty Ltd, a Notice of authorisation to engage in industrial action in similar terms to the Notice referred to above. 17 On 5 May 2005 the respondent also served notices of authorisation to engage in industrial action on each of the other subcontractors working on the Como site. Serious question to be tried 18 I now turn to consider whether there is a serious issue to be tried. There are two elements to this question. Firstly, is there a serious question to be tried that the threatened industrial action would breach section 45D of the Trade Practices Act. Secondly, is there a serious question to be tried whether the threatened industrial action is permitted as comprising action falling within the ambit of section 45DD of the Trade Practices Act or as comprising 'protected action' under provisions of the Workplace Relations Act. 19 In my view, on the evidence as it stands, there is a serious question to be tried that the threatened industrial action if carried out would comprise a breach of section 45D of the Trade Practices Act. Firstly, it is clear from the terms on the notice of authorisation to take industrial action that the respondent intends to act in concert with its members who are employees carrying out work on the Como site to withhold labour from their respective employers – namely the subcontractors engaged on the site. Secondly, if such action was undertaken it would mean that each of the subcontractors would be hindered or prevented from supplying services to the applicant under the terms of its subcontract. Thirdly, I accept the submission of Mr Hotchkin on behalf of the applicant that the inference is open, on the evidence as it stands, that the Respondent's purpose (within the meaning of section 45D(1) and (2) of the Trade Practices Act) in seeking to carry out the threatened industrial action is to cause substantial loss to the applicant. Evidence capable of giving rise to this inference includes the fact that the respondent gave the notice to commence a bargaining period to Broad one day after the commencement of the Supreme Court proceedings and to the applicant two days after the commencement of the proceedings; these notices were given in circumstances where previously there had been no intimation that the respondent wanted to negotiate a certified agreement under the Federal Act and that such discussions as had taken place between the officials of the respondent and the WA Union and Mr Rummukainen were to the effect that any new industrial agreement would be negotiated under the State Act; the fact that the applicant had no employees in respect of which it could negotiate a certified agreement and that this fact had been conveyed to Mr McDonald on behalf of the respondent by the applicant after it had received the notice of commencement of a bargaining period and prior to the service by the respondent of the Notice of authorisation to take industrial action on 5 May 2005; and the fact that employees who attended the union meeting called by Mr McDonald on the morning of 5 May 2005 had reported that Mr McDonald had directed the employees to go on strike 'against Broad'. Fourthly, the threatened action would likely to have the effect of causing substantial loss because the applicant was, on the evidence of Mr Rummukainen, liable under its construction contract to pay liquidated damages for delay and the applicant was already one month behind schedule due to industrial disputes. 20 I am also of the view that there is, on the evidence as it stands, a serious question to be tried that the threatened industrial action is not permitted under section 45DD of the Trade Practices Act because the applicant has no employees engaged in construction work and the threatened industrial action cannot in respect of the applicant be substantially related to the working conditions of its employees such as would render it action which was permitted under the section 45DD of the Trade Practices Act. Further, the threatened industrial action is action whereby all the employees at the Como site would withdraw their labour and, in my view, that circumstance also gives rise to a serious question to be tried as to whether the threatened action falls outside the ambit of the protection of section 45DD of the Trade Practices Act. 21 Further, in my view, there is, on the evidence as it stands, also serious question to be tried that the threatened industrial action does not fall within the ambit of 'protected action' within the meaning of that expression in s 170ML(2) of the Workplace Relations Act. It is suffice in these circumstances that I refer to the following reasons for coming to that view. Firstly, section 170MP(1)(a) provides that the union must first genuinely try to reach agreement with the employer before it begins to engage in industrial action. Based on the evidence of the manner in which the respondent dealt with Com–al Windows Pty Ltd when it did not wait for the expiry of its own deadline to get a response to its invitation to enter into negotiations for a certified agreement, before issuing of notice of intended industrial action, the inference is open that the respondent did not genuinely first try to reach an agreement with the employer in question. Secondly, section 170MM of the Workplace Relations Act provides that the industrial action must not involve a secondary boycott and I have already found that there is a serious issue to be tried that the threatened industrial action would involve a secondary boycott. Thirdly, the union must engage in industrial action for the sole purpose of advancing claims made in respect of the proposed agreement (F H Transport Pty Ltd v Transport Workers Union of Australia (1997) 75 FCR 480). I have already found that there is a serious issue to be tried that the purpose of the industrial action (within the meaning of section 45D(1) and (2) is to cause substantial loss to the business of the applicant. 22 As I have mentioned the application for interlocutory relief was served upon the respondent at a time when it was not reasonably practicable for it to file any affidavits in response and that is why I have emphasised that my views are only based on the evidence as it stands at the moment. However, Mr Kucera who appeared on behalf of the respondent, argued that the commencement of the Supreme Court proceedings changed the industrial relationship between the applicant and its related companies, on the one hand, and the respondent on the other. He said that the respondent was reacting to the changed industrial landscape and that it was open to it to engage in robust industrial negotiations. 23 The applicant also argues that, in any event, pursuant to section 170MO(1) and (2) of the Workplace Relations Act it is necessary for the respondent to give 3 working days notice of any intention to undertake industrial action and that the notice issued by the respondent on 5 May 2005 did not give the 3 working days notice. It was accepted that Monday is a rostered day off. Mr Hotchkin on behalf of the applicant argued that at best for the respondent only 2 working days notice had been given namely Friday and Saturday. In my view, there is a serious question to be tried therefore that, in any event, the respondent did not give the requisite 3 working days notice and therefore on that basis the industrial action which was intended to take place commencing on Tuesday, 10 May 2005 would not be protected action. Balance of convenience 24 I now turn to consider the balance of convenience. The applicant argues that the balance of convenience favours it because the construction contract is a fixed price contract with liquidated damages and that because of industrial action the project is already one month behind schedule. Further delays would cause the applicant to fall further behind the schedule and there would be further losses. 25 The respondent argues that it would suffer serious prejudice if I was to grant the injunction in the terms that the applicant has framed its relief (which was that the injunction be granted until further order) because it would amount to final relief and would thereby deprive the respondent of its statutory rights to resort to industrial action as part of the negotiation process for a certified agreement under the Workplace Relations Act. It would be particularly unjust if this were to occur when the respondent has not had an opportunity to put any evidence before the Court. There is clearly merit in the respondent's argument. 26 The respondent also argued that an injunction should not be granted because the Court should be particularly cautious about granting injunctions in relation to industrial relations matters. Further, the respondent argued that section 87AA of the Trade Practices Act provides that in exercising its powers in proceedings in relation to boycott conduct the Court must have regard to 'any action the applicant in the proceedings has taken, or could take before an industrial authority in relation to the boycott conduct. In particular, the Court is to have regard to any application for conciliation that the applicant has made or could make.' The respondent argued that the applicant after having received the notice of authorisation to take industrial action on 5 May 2005 should have referred the matter to the Australian Industrial Relations Commission but did not do so, and resorted to the Court as the first port of call for relief. It was said that the Court should not grant relief in those circumstances. 27 I do not accept that the Court is precluded from granting injunctive relief if an applicant has not first referred the matter to the Australian Industrial Relations Commission. This is, however, a matter which must be taken into account in the Court's decision as to whether to grant injunctive relief. 28 In weighing the balance of convenience the Court is entitled to take into account the strength of the case. In my view the applicant has a strong case that the notice of authorisation to take industrial action which was issued by the respondent on 5 May 2005 did not give the requisite 3 working days notice and that therefore there is a strong case, on that ground alone, that any industrial action that the respondent may cause to be taken at the Como site on Tuesday, 10 May 2005, would not be protected and would be in breach of section 45D of the Trade Practices Act. At this stage, however, in light of the fact that the respondent has not had an opportunity to place evidence before the Court I do not intend to assess the strength of any other aspect of the applicant's case in weighing the balance of convenience. 29 In my view, an interim injunction should issue which precludes the respondent for a period of 7 days from taking, along with its members, the threatened industrial action. This gives effect to the strength of the case that that any such industrial action would not be protected action by reason of the lack of requisite notice, and the attendant damage that would be suffered by the applicant by the disruption to the work on the Como site. On the other hand, no substantial prejudice will be suffered by the respondent if it is prevented for a short period of time from being able to engage in industrial action in furtherance of its statutory rights to negotiate certified agreements. 30 I also take into account that the applicant did not take any steps after the issue by the respondent of the notice of authorisation to take industrial action on 5 May 2005 to refer that matter to the Australian Industrial Relations Commission. However, in my view this should not in the circumstances preclude the grant of this interim relief, but I will require that as a condition of the relief the applicant refer this matter to the Australian Industrial Relations Commission within 24 hours. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis . Associate: Dated: 13 May 2005 Counsel for the Applicant: Mr Michael Hotchkin Solicitor for the Applicant: Hotchkin Hanly Counsel for the Respondent: Mr Timothy R Kucera Solicitor for the Respondent: The Construction, Forestry, Mining and Energy Union of Workers Date of Hearing: 9 May 2005 Date of Order: 9 May 2005 Publication of Reasons: 13 May 2005