FEDERAL COURT OF AUSTRALIA Construction, Forestry, Mining and Energy Union v Bechtel Construction (Australia) Pty Ltd [2014] FCA 703 Citation: Construction, Forestry, Mining and Energy Union v Bechtel Construction (Australia) Pty Ltd [2014] FCA 703 Parties: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION v BECHTEL CONSTRUCTION (AUSTRALIA) PTY LTD File number: QUD 164 of 2014 Judge: DOWSETT J Date of judgment: 1 May 2014 Legislation: Fair Work Act 2009 (Cth) s 345 Cases cited: Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238 applied Date of hearing: 1 May 2014 Place: Brisbane Division: FAIR WORK Category: No Catchwords Number of paragraphs: 21 Counsel for the Applicant: Mr E White Solicitor for the Applicant: Hall Payne Lawyers Counsel for the Respondent: Mr C Murdoch Solicitor for the Respondent: Norton Rose Fulbright Australia IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY FAIR WORK DIVISION QUD 164 of 2014 BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Applicant AND: BECHTEL CONSTRUCTION (AUSTRALIA) PTY LTD Respondent JUDGE: DOWSETT J DATE OF ORDER: 1 MAY 2014 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. the interlocutory application be dismissed; 2. the matter otherwise be adjourned for directions; and 3. there be no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY FAIR WORK DIVISION QUD 164 of 2014 BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Applicant AND: BECHTEL CONSTRUCTION (AUSTRALIA) PTY LTD Respondent JUDGE: DOWSETT J DATE: 1 MAY 2014 PLACE: BRISBANE REASONS FOR JUDGMENT 1 For some time, the respondent in these proceedings has been negotiating for the formation of a new industrial agreement with its employees. Four unions have been involved in those negotiations: the Construction, Forestry, Mining and Energy Union – the present applicant; the Australian Workers Union; the Australian Manufacturing Workers Union; and, the Communications, Electrical and Plumbing Union. 2 Terence Paul Pryor has been significantly involved in the negotiations on behalf of Bechtel, the present respondent. The unions have been negotiating on behalf of the employees. Mr Pryor has dealt with, on behalf of the CEPEU, Mr Ong, the CFMEU, Mr Ingham, the AMWU, Mr Bradley and the AWU, Mr Spence. Early in April, Bechtel made what has been described as its "best and final offer". It was eventually reduced to a draft agreement and circulated for consideration by interested parties. 3 Paragraph 3 of the draft provided that, "The union parties to this agreement are: the AMWU…, the CEPU…, the CFMEU…, and the AWU". At some time after the circulation of the draft, and as the result of information received by him, Mr Pryor formed the view that to the extent that the draft indicated that the CFMEU would be a party to the proposed agreement, it might be inaccurate. Apparently the CFMEU was opposed to the terms of the agreement and did not propose to be a party to it. 4 I infer for present purposes that the other unions were not happy with the terms of the proposed agreement but were willing to let the matter go to the employees for approval or otherwise, intending that in the event of approval, those unions would become parties to the agreement. Because of Mr Pryor's concern as to the correctness of the reference to the CFMEU he decided to issue another document in which he sought to clarify the position. A document dated 17 April 2014 was circulated on or about 23 April. It read as follows: To all employees, Re: BECHTEL QUEENSLAND LNG PROJECTS UNION AGREEMENT 2014 EMPLOYEE BALLOT We refer to the proposed Bechtel Queensland LNG Projects Union Agreement 2014 Enterprise Agreement (Agreement) that was distributed to employees between 14th – 17th April 2014. Following discussions between Bechtel and the relevant Unions, for the avoidance of doubt, Bechtel wishes to make it clear to employees that the CFMEU has not agreed to the Agreement and will not be a party to the agreement. If the Agreement is approved by the workforce ballot the CFMEU have the option under the Fair Work Act 2009 to elect to be covered by the Agreement. That, of course, is a matter for the CFMEU. Accordingly, the agreement is amended by the reading of clause 3(c)(3). Clause 3(c)(4) will now be renumbered as clause 3(c)(3). The date of the employee ballot in respect of the Agreement has been changed. The employee ballot will now take place between 0.01am on Friday 2nd May and 11.59pm Monday 5th May 2014. Please contact your Supervisor or a member of your Workforce Services team if you have any queries. 5 This document apparently raised more problems for some, or all of the union representatives. They feared that it might be read as suggesting that the unions had agreed to the terms of the proposed industrial agreement. As a result of such concerns, Mr Pryor spoke to the union representatives, other than Mr Ingham, in terms which appear in a letter in which he set out the points which he understood to be of concern. He then indicated that he proposed to issue a circular covering those points. 6 Mr Ong and one of the other representatives indicated that they were agreeable to that course. On 24 April a further document was issued which, in effect, set out the circumstances which had led to the document dated 17 April. It read as follows: Following the communications issued (dated 17 April 2014) with regard to the amendment to the proposed Bechtel Queensland LNG Projects Union Agreement 2014 Enterprise Agreement (Agreement) some people have queried why the amendment was made. The reasons why Bechtel did so are as follows: Clause 3(c) of the Agreement detailed the parties as including the 4 unions – the CFMEU, AWU, AMWU and CEPU. We were concerned that if the Agreement was voted up, and one of the unions did not agree with the wording in the agreement around the 'parties', the use of such wording might have stopped the agreement being approved by the Fair Work Commission. The CFMEU has stated that it does not agree with the wording in the proposed Agreement around the 'parties'. The other unions have indicated that they do not have a problem being named as 'parties' as described in the proposed Agreement subject to it being voted up by workforce ballots. As a consequence of the CFMEU position, we have had to remove the reference to them from the parties clause in the Agreement (i.e. clause 3(c)), otherwise the Agreement may get voted up by the workforce, but not be approved by the Fair Work Commission. We accordingly amended the proposed Agreement by the communication issued (dated 17 April 2004). If the agreement is voted up, the CFMEU can still elect to be covered by the agreement if it wishes. Workforce Services have already briefed a number of employees on these matters. If you have any queries, please speak with your Supervisor or a member of your Workforce Services team. 7 This document explains the history which led to the document dated 17 April 2014. However it seems that at least part of the concern about that document was that it might have been read as suggesting that the unions (other than the CFMEU) were supporting the proposed agreement. In fact, although they were happy to be named in cl 3 in the event that it was approved by employees, they did not otherwise approve of it. 8 This is a rather subtle point, given that the union representatives had indicated their willingness to be bound by the decision of the employees and to either become, or not become a party to the agreement on that basis. In any event, the CFMEU now seeks to restrain the conduct of a ballot of the employees to determine whether or not they accept the proposed agreement. The ballot is to take place tomorrow. The CFMEU relies upon s 345 of the Australian Fair Work Act 2009 (Cth) which provides: (1) A person must not knowingly or recklessly make a false or misleading representation about: (a) the workplace rights another person; or (b) the exercise, or the effect of the exercise, of a workplace right by another person. (2) Subsection (1) does not apply if the person to whom the representation is made would not be expected to rely on it. 9 The CFMEU submits that the document dated 17 April misrepresented the position of the other three unions in connection with the terms of the proposed agreement, and that the document dated 24 April further exacerbated that position. For present purposes, and without deciding the question, I am satisfied to proceed upon the basis that such a representation would be about workplace rights or the exercise thereof. The CFMEU moves for interlocutory relief, effectively restraining or deferring the conduct of the ballot. Questions which arise for determination are whether there is a prima facie case to be addressed as explained in the decision of this Court in Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238, and as to the balance of convenience. 10 I shall make some preliminary observations concerning the balance of convenience. The effect of the decision in Samsung, and of decisions of the High Court upon which it is based, is that the balance of convenience may affect the degree of satisfaction which the Court must have as to the existence of a prima facie case in order that interlocutory relief be granted. 11 The CFMEU says, concerning the balance of convenience, that a vote infected by the alleged misrepresentations may be unduly influenced by them, and that it may not be possible to remedy the position after the event. It appears to be common ground that any agreement made following the ballot would have to be approved by the Fair Work Commission, and that an interested party would be entitled to raise with the Commission the propriety of the ballot, and whether the outcome reflected the genuine agreement of the employees. 12 The CFMEU submit that it may be difficult for the employees, or their representatives to establish to the requisite degree the extent of infection of the ballot so as to justify the Commission in refusing to approve the agreement. Bechtel submits that there are significant considerations going to the balance of convenience from its point of view. It provides relatively detailed information as to the likely cost to it of any delay in the ballot. A conservative figure is said to be $375,000. A more realistic cost is said to be in the order of $600,000, together with certain other costs. There would also be the inevitable delay in bringing the industrial negotiations to a final resolution. I am unpersuaded as to the difficulties identified by the CFMEU in connection with the process of approval in the Commission. It seems to me that it would not be all that difficult to argue the likely effect of the alleged misrepresentation upon the employees, nor would it be that difficult to produce a representative sample of employees who might give evidence as to the effect of the documents upon them, assuming that the Commission considered such evidence to be relevant. The significant financial imposition upon Bechtel is rather more cogent. The balance of convenience probably favours Bechtel's position. 13 There is the additional complication that although the other unions are opposed to the terms of the proposed agreement, they are nonetheless content to let the employees resolve the matter, and to accept their decision. None of those unions presently complains about what has happened. There is, however, evidence from Mr Ong in which the position of his union is made quite clear. 14 I turn to the question of a prima facie case. Whilst I cannot say that the CFMEU case is entirely without substance, it depends upon a particular reading of the documents, divorced from the circumstances in which they were created and circulated. The CFMEU submits that the context is important but fails to give effect to it. 15 From Bechtel's point of view the events which occurred after the circulation of the agreement were designed to correct a potentially fatal error in the documentation. Mr Pryor understood that all of the unions, except the CFMEU were proceeding upon the basis that the matter was to be left to the employees. They had every opportunity, at various meetings to communicate to their members their attitudes. There is no doubt that they did so. Whilst it is theoretically possible that the document of 17 April could have led to confusion and, perhaps, a perception amongst some employees that the position had changed, I am not sure that any such misunderstanding would have arisen from the wording of the document itself, or the context in which it was given. The preferred reading of the document is that it was correcting a perceived error, and nothing more. Nothing in the documents suggests that any of the unions actually endorsed or recommended adoption of the terms of the proposed agreement. 16 In that context, and having regard to the opportunities which the unions had to make their views known, I am of the view that any other reading of the document would have been unreasonable. The document of the 24th was designed to clarify the document of 17 April, having regard to its purpose. Neither document says anything about the attitude of the unions. I do not think that it could reasonably be inferred that either document implied that the unions had approved the proposed terms. 17 The unions may have preferred that Bechtel had stated expressly that the unions did not approve the proposal. However Bechtel had never said that the unions approved it. As I do not accept that any reasonable reading of the document would lead to such an inference, I cannot see that Bechtel was under any obligation to make a specific statement by way of denial. 18 The second problem with which the CFMEU must deal in seeking to establish a prima facie case is the identification of evidence which would suggest that the statements made were knowingly or recklessly made, assuming that they were otherwise false or misleading. 19 As I have said, the context in which these documents appeared suggested that Mr Pryor was seeking to do nothing more than deal with a particular difficulty which had arisen as a result of uncertainty concerning the CFMEU position. I do not accept that the documents would justify an inference that they were made knowingly or recklessly. 20 Although I cannot say that the CFMEU's case is entirely without merit, I do not consider that it has established a prima facie case to the requisite level, having regard to the seriousness of the adverse consequences to Bechtel in the event that the ballot is put off. I have had particular regard to the fact that the Commission will be able to reconsider the matter if there is evidence suggesting that the legitimacy of the ballot can be impugned because of the alleged misrepresentations. 21 In those circumstances, the application for interlocutory relief will be dismissed. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate: Dated: 4 July 2014