FEDERAL COURT OF AUSTRALIA

Australian Mines and Metals Association Inc v The Maritime Union of Australia [2016] FCAFC 71

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

SIOPIS J:

1    I have read the reasons for judgment of Buchanan J. For the reasons given by Buchanan J, I agree that the appeal should be dismissed.

Associate:

Dated:    25 May 2016

REASONS FOR JUDGMENT

BUCHANAN J:

Background

2    The appellants are all organisations registered under the Corporations Act 2001 (Cth). The respondent (“the MUA”) is an organisation registered under the Fair Work (Registered Organisations) Act 2009 (Cth) and also has corporate status.

3    The second to fifth appellants (“Swire”, “Tidewater”, “Skilled” and MMA Offshore Vessel Operations Pty Ltd (previously Mermaid Marine Vessel Operations Pty Ltd (“Mermaid”)) were each a party to an enterprise agreement to which the Fair Work Act 2009 (Cth) (“the FW Act”) applied (the Swire Pacific Ship Management (Australia) Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010; the Tidewater Marine Australia Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010; the Offshore Marine Services Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010; the Mermaid Marine Vessel Operations Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010).

4    Each of the agreements had a nominal expiry date of 30 July 2013 or 31 July 2013.

5    In about December 2012, “bargaining” commenced for new agreements to replace each of the existing agreements which, under the FW Act, remained in force beyond their nominal expiry date.

6    The first appellant (“AMMA”) was, on various dates between 5 March 2012 and 28 October 2013, appointed as the “bargaining representative” of Swire, Tidewater, Skilled and Mermaid under the FW Act.

7    The MUA was also a bargaining representative for at least one employee of each of those employers in relation to bargaining for a new agreement.

8    On 16 May 2014 (on behalf of Swire, Skilled and Mermaid) and on 20 May 2014 (on behalf of Tidewater), AMMA applied to the Fair Work Commission (“FWC”) under s 229 of the FW Act for a bargaining order under s 230 of the FW Act. Statutory prerequisites to making such an order are set out in s 230(3):

230    When the FWC may make a bargaining order

…

(3)    The FWC must in all cases be satisfied:

(a)    that:

(i)    one or more of the relevant bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or

(ii)    the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and

(b)    that the applicant has complied with the requirements of subsection 229(4) (which deals with notifying relevant bargaining representatives of concerns), unless subsection 229(5) permitted the applicant to make the application without complying with those requirements.

9    On 9 July 2014, the FWC made interim orders under s 230 of the FW Act. The interim orders were made by consent.

10    One aspect of the orders required the MUA, on or before 21 July 2014, to set out and prioritise the claims it would pursue against each employer and provide an undertaking not to pursue other claims. The orders also required the MUA to provide a written undertaking to the FWC that it would not pursue certain claims (e.g. discriminatory practices, restrictions on use of contractors, and other matters).

11    Those things were not done, although other aspects of the orders were carried into effect.

12    In the pleaded case against the MUA it was alleged (and the MUA by its defence denied) that the MUA contravened the orders by not complying with the requirements I have referred to. The MUA, in addition, pleaded that it made substantial compliance.

13    On 22 July 2014, AMMA wrote to the MUA about the question of compliance. Later that day, the MUA provided to the FWC, and to the employers, documents which, by its defence, it claimed represented compliance with the orders in question. The pleaded case against it described those documents as “purported compliance”.

14    Meanwhile, on 18 July 2014, the MUA had given notice to Swire of two consecutive 24-hour stoppages to take place on 25 and 26 July 2014.

15    On 22 July 2014, Swire applied to the FWC for an order to stop or prevent the notified stoppages on the ground that they would not constitute “protected industrial action”.

16    During the second day of hearing before the FWC, on 24 July 2014, the MUA withdrew the notice of intended industrial action.

17    The following day, 25 July 2014, the MUA provided further documents to AMMA and the FWC. The MUA said in its defence that provision of further documents was “to remove any doubt about previous compliance”.

18    In their pleaded reply, AMMA and the employers contended that the documents provided on 22 July 2014 did not represent even substantial compliance with the relevant orders because they were late, and either substantially qualified or substantially incomplete. The documents provided on 25 July 2014 were accepted to be complete and unqualified but were asserted not to represent compliance with the orders because they were late.

19    On 27 July 2014, the MUA sought from the FWC a variation of the orders made on 9 July 2014 to provide a longer period for compliance. [We were informed on the appeal that the application for variation was not determined by the FWC until 21 July 2015, after the judgment which is the subject of the present appeal (3 July 2015), when the application was dismissed.]

20    Both aspects of the circumstance that the documents provided by the MUA finally met the requirements of the interim orders made on 9 July 2014, but not within the time allowed by the orders, are important for the present case.

Claims for relief

21    Relying on the foregoing matters, the appellants sought declarations based on s 413(5) of the FW Act to the effect that any future industrial action by the MUA or its members concerned with bargaining for any of the proposed agreements would not be protected industrial action.

22    Section 413(1) and (5) of the FW Act provide:

413    Common requirements that apply for industrial action to be protected industrial action

Common requirements

(1)    This section sets out the common requirements for industrial action to be protected industrial action for a proposed enterprise agreement.

…

Compliance with orders

(5)    The following persons must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement:

(a)    if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;

(b)    if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the employee and the bargaining representative of the employee.

(Emphasis in original.)

[I shall later set out s 413 in full to deal with another issue].

23    One significance of industrial action being protected industrial action is stated by s 415 of the FW Act:

415    Immunity provision

(1)    No action lies under any law (whether written or unwritten) in force in a State or Territory in relation to any industrial action that is protected industrial action unless the industrial action has involved or is likely to involve:

(a)    personal injury; or

(b)    wilful or reckless destruction of, or damage to, property; or

(c)    the unlawful taking, keeping or use of property.

(2)    However, subsection (1) does not prevent an action for defamation being brought in relation to anything that occurred in the course of industrial action.

24    Another significance of industrial action being protected industrial action is that, if the FWC makes an order under s 418 (to which I will return in a moment) that industrial action stop or not occur, the order is not effective if the industrial action was, or would be, protected industrial action. Section 421(1) and (2) provide:

421    Contravening an order etc.

Contravening orders

(1)    A person to whom an order under section 418, 419 or 420 applies must not contravene a term of the order.

Note:    This subsection is a civil remedy provision (see Part 4-1).

(2)    However, a person is not required to comply with an order if:

(a)    the order is an order under section 418, or an order under section 420 that relates to an application for an order under section 418; and

(b)    the industrial action to which the order relates is, or would be, protected industrial action.

[Section 420 deals with interim orders of a similar kind to s 418.]

25    A third significance of industrial action being (or not being) protected industrial action (at least in the assessment of the FWC) concerns the obligation of the FWC under s 418. Section 418(1) provides:

418    FWC must order that industrial action by employees or employers stop etc.

(1)    If it appears to the FWC that industrial action by one or more employees or employers that is not, or would not be, protected industrial action:

(a)    is happening; or

(b)    is threatened, impending or probable; or

(c)    is being organised;

the FWC must make an order that the industrial action stop, not occur or not be organised (as the case may be) for a period (the stop period) specified in the order.

Note:    For interim orders, see section 420.

(Emphasis in original.)

26    In each of those cases, the assessment which is required in the relevant proceedings (before a court for s 415 and s 421 and in the FWC for s 418) concerns the character of industrial action at the time of its occurrence, organisation or when it is in prospect (threatened, impending or probable).

27    By contrast, the application made by the appellants sought declarations to the effect that contravention of the interim orders made on 9 July 2014 had the consequence that, thereafter, there could be no protected industrial action taken or organised by the MUA in connection with the negotiation of new enterprise agreements because s 413(5) erected an insurmountable barrier to satisfaction of the common requirements of s 413.

28    That was so, on the appellants’ case, even though the period of non-compliance with the interim orders was short (four days) and the documents in question had then been supplied.

29    The application for declarations was dismissed (Australian Mines and Metals Association Inc v The Maritime Union of Australia [2015] FCA 677).

30    The primary judge identified the “key issues” in the proceedings as follows (at [7]):

7    The key issues arising in the proceeding may be stated as follows:

(1)    whether s 413(5) applies without qualification to any contravention no matter when it occurred, whether the contravening conduct is continuing, whether it has been rectified or whether it has been punished or enjoined under other provisions of the FW Act;

(2)    whether the orders which it is alleged that the MUA has contravened were capable of being substantially complied with; and

(3)    if so, whether the MUA did substantially comply with the orders.

31    The submissions of the appellants to the primary judge proposed a strict view of the necessity for compliance with the terms of orders of the FWC, comparing them to orders of a court and drawing attention to the fact that there was no statutory recognition in the FW Act of any notion of “substantial compliance” (c.f. Corporations Act 2001 (Cth), s 445G(3); Acts Interpretation Act 1901 (Cth), s 25C).

32    The MUA’s submissions were to the effect that, based on well accepted principles of statutory construction, and having regard to the evident purpose of the statutory scheme for bargaining, s 413(5) should not be given the strict, literal or absolute meaning for which AMMA and the employers contended. In that context, s 413(5) should be construed to refer to “continuing contravening conduct” taking place at the time industrial action is to occur. The MUA also argued that substantial compliance was sufficient compliance.

Reasoning of the primary judge

33    The primary judge found, on the facts, that “purported” compliance with the orders by the MUA did not occur until 25 July 2014 – i.e. four days late.

34    However, his Honour found that s 413(5) only referred to contravention of orders which applied at the time of proposed industrial action. His Honour said (at [157]):

157    The reference to “any orders that apply to them” suggests that, at the time of the proposed industrial action, there are currently orders “that apply to them”, which orders have not previously been contravened.

and (at [169]):

169    The real point is that the expression “orders that apply to them”, in the context of a definition dealing with protected industrial action, necessarily has to do with orders that apply at the time the industrial action is proposed. If the Parliament had intended that any contravention – whenever it occurred – in respect of a bargaining order made, and that related to a matter that arose during bargaining for the agreement, should disqualify the proposed industrial action from being protected industrial action, then a different form of words would have been used in s 413(5). The appropriate words, for example, might have been: “The following persons must not have contravened any orders that apply or applied to them”.

(Emphasis in original.)

35    The primary judge was particularly influenced by the fact that (at [171]):

171    … Parliament could easily have made it quite clear – which I do not consider it has – that any breach of a bargaining order of the relevant kind disqualifies industrial action from being protected industrial action. Because it is industrial action proposed at a particular point in time that falls for consideration as to whether or not it is protected industrial action as defined, I consider the expression “any orders that apply to them and that relate to … a matter that arose during bargaining for the agreement” must be taken necessarily to focus on any orders that apply to the bargaining representative or employee at the time the industrial action is proposed.

(Emphasis in original.)

36    His Honour went on (at [174]):

174    The legislative intention that may be derived from the proper construction of the relevant provisions concerning protected industrial action is that a bargaining representative of the employee, in a case such as the present, will not be entitled to take protected industrial action if it is in contravention of any orders that, at the time of the proposed industrial action, apply to that bargaining representative.

(Emphasis added.)

37    The construction adopted by the primary judge did not accord entirely with the position argued by either side in the proceedings before him, but it has not been suggested that, on a question of construction of this kind, he was bound to accept one or other of those positions.

38    Separately, the primary judge rejected the MUA’s argument about substantial compliance, saying (at [190]):

190    In light of the answer to the question concerning the proper construction of s 413(5) dealt with above, it is strictly not necessary to deal with this further contention on behalf of the MUA, but to the extent that I am wrong in relation to that constructional issue, I do not accept the submissions made on behalf of the MUA to the effect that it is possible to substantially comply with orders 1 and 8 and that the MUA did substantially comply with those orders.

An alternative approach

39    The same issue of construction arising from s 413(5) of the FW Act was dealt with in a judgment of Jessup J delivered shortly thereafter (Esso Australia Pty Ltd v The Australian Workers’ Union [2015] FCA 758; (2015) 253 IR 304).

40    In the first instance, Jessup J considered the operation of s 413(5) independently of the conclusions of the primary judge in the present case. Jessup J, by reference to legislative history and by reference to accepted canons of construction (at [134]) rejected a submission that:

134    … manifestly unintended outcomes could be avoided only if the provision were limited to a situation in which, at the time of the taking of the industrial action claimed to be protected, the bargaining representative was then in contravention of an order of the Commission of the kind referred to, being a contravention that could be put to rights by compliance with the order. …

41    His Honour said (at [135]):

135    This construction of s 413(5) does not sit well with the terms of the provision itself. Nor does it derive obvious support from the legislative history to which I have referred. The provision is no longer concerned with securing compliance with an order that might be complied with. It is concerned with contraventions, rather than with compliance. Moreover, as the use of the present perfect tense makes clear, it looks to what has happened at any time in the past, more so than with an existing state of affairs that may be rectified. Grammatically, the provision is perfectly clear, although the scope of its denotation in practical situations may be a matter of controversy (by which I have in mind, for example, the possibility of contention over whether some matter “arose during bargaining for the agreement”). But, on the facts of this case, no such issue of purely grammatical controversy arises.

and (at [136]-[137]):

136    If for no reason other than that the respondent’s submission did not proceed from a consideration of the scope or operation of previous legislation, this is not the occasion to venture an opinion on such matters. One thing is clear, however: the change made by the enactment of s 413(5) of the FW Act was, in the respects to which I have referred in the previous paragraph, one of substance. I am bound to approach the problem by reference to a perception that the draftsman turned his or her mind to the content of the new provision, and consciously resolved to express it in terms which differed from those of its predecessors. At the general level, the FW Act was concerned with law reform as a matter of high policy. Given the different wording now employed in s 413(5), there is every reason to suppose that this was a change in substance that reflected the intention of the legislature.

137    The other problem with the respondent’s submission is that it is not concerned with some confined, specific, aspect of the terms of s 413(5) where there is some cause to believe that the draftsman might have, in effect, got the legislative intention wrong. Rather, the submission proposes that the provision should be given an operation which departs from the text at a high level. The respondent would have the court impress upon the provision a meaning for which there is no support in that text. The principle referred to in Cooper Brookes applies, in my view, only where it is quite clear what the legislature intended, alternatively to what the draftsman wrote. But the present is not such a case. There is nothing to indicate what the legislature did intend here, if it did not intend what is conveyed by the literal meaning of the provision. Any suggestion that it intended to effect no change from the terms of s 443(1) of the WR Act could not, for the reasons I have given, be taken seriously, and no such suggestion was in fact made by the respondent.

42    Then Jessup J turned to the judgment under appeal here, and the reasons of the primary judge. It is evident that Jessup J was not inclined to the construction given by the primary judge. Jessup J said (at [144]-[147]):

144    For my own part, with respect, I consider that there is some force in the criticisms of Mines and Metals which have been voiced on behalf of the applicant in the present case. In my view, Barker J’s approach places too great a constructional burden upon a grammatical form which is not central to the meaning of the provision. Indeed, I regard the passage “that apply to them” as adjectival apropos “any orders”, its purpose being to confine the operation of the subsection to orders which apply to the person concerned. I am unpersuaded by the rejoinder of the respondent that the passage must have been intended to introduce an additional qualifier since there could have been no contravention if an order did not apply to the person concerned. More generally, I take the view that the extended passage “must not have contravened any orders that apply to them” can only be a reference to orders which applied to the person at the time when the contravention occurred.

145    I also take the view, with respect, that the proposition that an order not complied with by the time specified in it for compliance is “spent”, and therefore no longer applies to the person required to comply, is problematic. As it seems to me, the consequence would be that, before the time specified, there could be no contravention on the ground that the period for compliance was still running, while, after the time specified, there could be no contravention on the ground that the order was spent. That s 413(5) should be understood in this way strikes me, with respect, as particularly odd, and unlikely to have been intended.

146    On the other hand, although a question of construction, what is really involved here is a problem with the way that s 413(5) operates in a particular context, namely, one in which an order specifying a time for compliance has been made. To point to the oddity of a particular outcome by reference only to a fact situation of that kind really throws no light on what the legislature intended. I was assured by counsel for the respondent that the parliamentary materials are unhelpful with respect to this question, the likelihood being that the legislature gave absolutely no consideration to the result that the provision would yield in the specific facts now before the court.

147    The construction given to s 413(5) in Mines and Metals is not one which I would have endorsed in the absence of that judgment. However, notwithstanding that reservation, I am unable to reach the point of holding that that judgment is clearly, or plainly, wrong. I take the view that the considerations of comity so forcefully expressed in the two Full Court judgments referred to above leave me with no option but to accept that construction.

(Emphasis added.)

43    So it is that, although Jessup J applied the reasoning and construction of the primary judge as a matter of comity, there are two different constructions favoured by individual judges of the Court which reflect, more or less, the principal issue of construction between the parties to this appeal.

44    I do not share the reservations expressed by Jessup J to the approach taken by the primary judge. On the contrary, in my respectful view, the construction applied by the primary judge was the correct one, for reasons I will attempt to explain.

45    In particular, I agree that s 413(5) is concerned with whether there has been a contravention of orders applying at the time of the taking or organising of the industrial action which is being assessed to see whether it is, or would be, protected industrial action. Furthermore, it seems to me to be apparent that any such order would need to be one which could be said to be contravened by the conduct or action of organising or taking the particular industrial action in question.

Notice of contention

46    The respondent to the appeal also filed a notice of contention, seeking to uphold the conclusions of the primary judge upon the basis that s 413(5), properly construed:

is limited in its operation to contraventions where the contravening conduct is continuing at the time when the relevant bargaining representative is seeking to organise or arrange protected industrial action.

(Emphasis added.)

47    If the word “occurring” was substituted for “continuing”, I would accept the construction offered in the notice of contention, although I do not discern any real difference from the approach taken by the primary judge unless it emerges from [157] of his Honour’s judgment, quoted earlier and again below.

48    The argument in support of this contention was advanced to the primary judge, and was recorded by him as follows (at [105]):

105    The MUA submits that in the overall statutory context, the intended purpose of s 413(5) is to focus on the point of time at which the protected industrial action is proposed to be arranged or taken, and at that time to prevent the bargaining representatives from approbating and reprobating about their bargaining obligations by continuing contravening conduct while simultaneously seeking to take protected industrial action. It is not intended to be a further means of punishment for contraventions that have occurred and which are complete, in the sense that the offending conduct is no longer continuing.

49    The primary judge dealt with this contention in reasons which led to the conclusion at [157] (at [144]-[158]):

144    The MUA do not contest that the orders in question in each case relate to a matter that arose during bargaining for the enterprise agreement in each case.

145    The MUA contends, however, that properly construed, the expression “must not have contravened any orders that apply to them”, when it comes to the taking of protected industrial action does not comprehend the MUA’s conduct in failing to comply with orders 1 and 8 by the close of business on 21 July 2014, where it four days later complied with the substance of those orders, and bargaining for an enterprise agreement has been conducted from December 2012 “until the present time”.

146    In the course of argument at the hearing, senior counsel for the MUA accepted that, in a literal sense, the MUA by failing to comply with the requirement to provide the relevant documentation to AMMA by the close of business on 21 July 2014 “contravened” orders 1 and 8.

147    Senior counsel submitted, however, that the relevant text of s 413(5) should be construed as if it read:

The following persons must not have contravened and be continuing to contravene any orders that apply to them …

148    By reference to the authorities relied on by the MUA and set out above, senior counsel submits that a capricious or incongruous or unjust result would be achieved if the conduct of the MUA in not complying with the orders made on the due date (conduct which it is noted the applicants do not suggest constitutes “serious breaches” for the purposes of ss 234 and 235 of the FW Act) is held to support a declaration that it cannot now take protected industrial action.

149    The MUA says that a literal construction of the provision would produce a capricious or incongruous or unjust result in that the right to strike – to take protected industrial action – that is provided by the FW Act would be stripped of it during the bargaining process that has continued until the present time.

150    In my view, when one has regard to the terms of s 408 which define “protected industrial action”, and the related definition of “employee claim action” in s 409, the “industrial action” in question is to be regarded at the particular point in time it is proposed.

151    It follows, in my view, that when one comes to the common requirements that apply for “industrial action” to be “protected industrial action”, in s 413, the question is whether those requirements apply at the time the industrial action is proposed.

152    When one has regard to the terms of s 413(3), for example, which requires that in a case such as the present the MUA is “genuinely trying to reach an agreement”, that issue must be determined at the time of the proposed industrial action, although no doubt the history of a party’s conduct stretching back in time might be relevant to the determination of that question. But the question is whether at the time the industrial action is proposed that party is genuinely trying to reach an agreement.

153    So far as the requirement of s 413(4) is concerned, that is a question of fact so that the notice requirements set out in s 414 must have been met when the industrial action is proposed.

154    When it comes to s 413(5), relevantly the MUA “must not have contravened any orders that apply to them and that relate to … a matter that arose during bargaining for the agreement”.

155    When assessed at the time industrial action is proposed, the use of the expression “must not have contravened any orders”, may, as the applicants contend, suggest that any past contravention of orders “that apply to them and that relate to … a matter that arose during bargaining for the agreement” will disqualify the proposed industrial action from being protected industrial action.

156    However, in my view, the use of the words “that apply to them” that appear in the composite expression “must not have contravened any orders that apply to them” significantly militates against such a simple textual outcome.

157    The reference to “any orders that apply to them” suggests that, at the time of the proposed industrial action, there are currently orders “that apply to them”, which orders have not previously been contravened.

158    It would appear relevant therefore, at the time any industrial action is proposed, to ask whether the interim orders apply to the MUA, having regard to the events described above and set out in the statement of agreed facts. If, at the time of any proposed industrial action, orders 1 and 8 do not “apply” to the MUA, then it should not be concluded that the MUA has “contravened any orders that apply to them”.

(Bold and italic emphasis in original.) (Underlined emphasis added.)

50    It seems to me, having regard to the whole of the primary judge’s reasons, that the words I have emphasised in [157] have, ultimately, no particular significance for his Honour’s reasoning. I think his Honour was really intending to register disagreement, or draw a distinction, with the appellants’ argument. The crux of the primary judge’s reasoning was that s 413(5) was concerned with contraventions at the time of the current industrial action, and not earlier. I agree with that approach.

51    The MUA’s notice of contention would, in substance, accord I think with the conclusion of the primary judge that s 413(5) is directed to an examination of contravention “at the time” ([169]) or “at a particular point in time” ([171]). For that reason, it will require no further specific attention.

52    I propose now to attempt to explain my own reasons for agreeing with that construction.

My own analysis

53    The challenge (as I accept it is, due to the lack of legislative clarity which has led to the present debate) is to understand the operation of s 413(5) in the context of s 413 as a whole and in the context of the surrounding provisions.

54    I begin with the premise that the meaning of the constituent elements of s 413 is to be discerned, if possible, as a natural consequence of the statutory text, having regard to its place and evident purpose in the legislation in question.

55    In that connection it is relevant to observe that one “significance” of industrial action being “protected industrial action” is the subject of s 415 which I set out earlier. It is the first provision in “Subdivision C—Significance of industrial action being protected industrial action” of “Division 2—Protected industrial action” of “Part 3-3—Industrial action” of “Chapter 3—Rights and responsibilities of employees, employers, organisations etc.” of the FW Act.

56    The other important consequences, as I said, arise from the interrelated operation of s 418 (and s 420) and s 421. It is important to observe that, after the expiry of the nominal term of an enterprise agreement, industrial action (whether or not protected industrial action) is not directly prohibited by the FW Act (c.f. s 417). It may, if not protected industrial action, be prohibited by order of the FWC (ss 418, 420). The status of protected industrial action may be suspended or removed under provisions to which I will refer (ss 423 to 430 and s 431). And the status of protected industrial action must be achieved in compliance with a detailed regime consisting of a number of different elements.

57    Section 408 provides:

408    Protected industrial action

Industrial action is protected industrial action for a proposed enterprise agreement if it is one of the following:

(a)    employee claim action for the agreement (see section 409);

(b)    employee response action for the agreement (see section 410);

(c)    employer response action for the agreement (see section 411).

(Emphasis in original.)

58    Sections 409, 410 and 411 then state particular conditions to be satisfied for each form of protected industrial action. It is sufficient to set out s 409 and to note that its requirements are ones to be satisfied when industrial action is organised or engaged in – i.e. at that point in time. Section 409 provides:

409    Employee claim action

Employee claim action

(1)    Employee claim action for a proposed enterprise agreement is industrial action that:

(a)    is organised or engaged in for the purpose of supporting or advancing claims in relation to the agreement that are only about, or are reasonably believed to only be about, permitted matters; and

(b)    is organised or engaged in, against an employer that will be covered by the agreement, by:

(i)    a bargaining representative of an employee who will be covered by the agreement; or

(ii)    an employee who is included in a group or groups of employees specified in a protected action ballot order for the industrial action; and

(c)    meets the common requirements set out in Subdivision B; and

(d)    meets the additional requirements set out in this section.

Protected action ballot is necessary

(2)    The industrial action must be authorised by a protected action ballot (see Division 8 of this Part).

Unlawful terms

(3)    The industrial action must not be in support of, or to advance, claims to include unlawful terms in the agreement.

Industrial action must not be part of pattern bargaining

(4)    A bargaining representative of an employee who will be covered by the agreement must not be engaging in pattern bargaining in relation to the agreement.

Industrial action must not relate to a demarcation dispute etc.

(5)    The industrial action must not, if it is being organised or engaged in by a bargaining representative, relate to a significant extent to a demarcation dispute or contravene an FWC order that relates to a significant extent to a demarcation dispute.

Notice requirements after suspension order must be met

(6)    If section 429 (which deals with employee claim action without a further protected action ballot after a period of suspension) applies in relation to the industrial action, the notice requirements of section 430 must be met.

Officer of an employee organisation

(7)    If an employee organisation is a bargaining representative of an employee who will be covered by the agreement, the reference to a bargaining representative of the employee in subparagraph (1)(b)(i) of this section includes a reference to an officer of the organisation.

(Emphasis in original.)

59    Section 409(2) engages the requirements of s 443. Section 443(1) and (2) provide:

443    When the FWC must make a protected action ballot order

(1)    The FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:

(a)    an application has been made under section 437; and

(b)    the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

(2)    The FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).

60    Again, the requirement to be satisfied is a contemporaneous one.

61    In addition to the particular requirements for specific kinds of industrial action to be protected (e.g. authorisation by a “protected action ballot” in the case of employee claim action) there are some “common requirements”. These are the requirements stated by s 413, which bears that heading.

62    Section 413 provides:

413    Common requirements that apply for industrial action to be protected industrial action

Common requirements

(1)    This section sets out the common requirements for industrial action to be protected industrial action for a proposed enterprise agreement.

Type of proposed enterprise agreement

(2)    The industrial action must not relate to a proposed enterprise agreement that is a greenfields agreement or multi-enterprise agreement.

Genuinely trying to reach an agreement

(3)    The following persons must be genuinely trying to reach an agreement:

(a)    if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;

(b)    if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the bargaining representative of the employee.

Notice requirements

(4)    The notice requirements set out in section 414 must have been met in relation to the industrial action.

Compliance with orders

(5)    The following persons must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement:

(a)    if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;

(b)    if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the employee and the bargaining representative of the employee.

No industrial action before an enterprise agreement etc. passes its nominal expiry date

(6)    The person organising or engaging in the industrial action must not contravene section 417 (which deals with industrial action before the nominal expiry date of an enterprise agreement etc.) by organising or engaging in the industrial action.

No suspension or termination order is in operation etc.

(7)    None of the following must be in operation:

(a)    an order under Division 6 of this Part suspending or terminating industrial action in relation to the agreement;

(b)    a Ministerial declaration under subsection 431(1) terminating industrial action in relation to the agreement;

(c)    a serious breach declaration in relation to the agreement.

(Emphasis in original.)

63    There is, obviously enough, also an even wider context to be taken into account, before I return to deal more particularly with the operation of s 413.

64    The advancement of collective bargaining which the FW Act encourages (see especially s 3(f) “achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action”) proceeds in large measure through the mechanisms for making enterprise agreements.

65    That is the particular subject of “Part 2-4—Enterprise agreements” of “Chapter 2—Terms and conditions of employment” of the FW Act. Section 171 states the objects of Part 2-4 as follows:

171    Objects of this Part

The objects of this Part are:

(a)    to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b)    to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:

(i)    making bargaining orders; and

(ii)    dealing with disputes where the bargaining representatives request assistance; and

(iii)    ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.

66    Provision is then made for employers and employees to have a “bargaining representative”. An employer is its own bargaining representative (s 176(1)(a)), but may appoint another person (s 176(1)(d)). An employee may appoint himself or herself as bargaining representative (s 176(4)), or appoint another person (s 176(1)(c)) or an employee organisation may in some circumstances be a bargaining representative of an employee who is its member (s 176(1)(b)).

67    Requirements are imposed upon bargaining representatives to bargain in good faith about the terms of a proposed enterprise agreement. Those requirements are stated in s 228. They may be supplemented by a bargaining order made under s 230. That is what happened in the present case.

68    If an enterprise agreement is successfully negotiated and approved by a majority of employees, it is made (s 182). A bargaining representative must then apply to the FWC for approval of the agreement (s 185). There are stated conditions for approval by the FWC.

69    An enterprise agreement comes into operation seven days after approval by the FWC, or on some later day specified in the agreement (s 54(1)). The nominal expiry date of the enterprise agreement must be not more than four years after the date of approval by the FWC (s 186(5)). An enterprise agreement will generally remain in operation after its nominal expiry date (see s 54(2)) until replaced by a further enterprise agreement (s 58(2)(e)) which cannot happen until the nominal expiry date of the first enterprise agreement is reached (s 58(2)(d)).

70    There are some important consequences which follow from the fact that an enterprise agreement has passed its nominal expiry date or, alternatively, has not.

71    Section 417 prohibits industrial action by persons (employer, employee or employee organisation or its officers) who are covered by an enterprise agreement which has not passed its nominal expiry date.

72    By contrast, after that date industrial action may be organised and taken in support of claims for a new enterprise agreement, which industrial action may be, or become, protected industrial action if the statutory conditions are met.

73    It is important to appreciate that at the expiry of the nominal term of an enterprise agreement, a prohibition on industrial action gives way to the possibility of industrial action. That such industrial action may not be protected does not signify that it is prohibited. Prohibition of industrial action in a bargaining period requires further steps to be taken – e.g. by application under s 418.

74    I may return now to the operation of s 413. In the context of the overall plan for bargaining towards an enterprise agreement to which I have referred, given that industrial action is not prohibited after a nominal expiry date and may, indeed, be clothed with statutory protection, the provisions in s 413 seem to me also (i.e. as do ss 409, 410, 411 and 443) to state conditions to be satisfied at the time industrial action is organised or engaged in.

75    That is to say, the stipulations in s 413 are those “for industrial action to be protected” (s 413(1)) (my emphasis). Satisfying that condition means that the industrial action, when it actually occurs, is protected, within the meaning and operation of s 415(1).

76    What then are the stipulations?

77    The industrial action (i.e. when it occurs) must not relate to a greenfields or multi-enterprise agreement (s 413(2)).

78    Stated persons must be genuinely trying to reach agreement (i.e. at the time the particular industrial action occurs or is organised). It is worth noting that the same identified persons referred to in s 413(3)(a) and (b) (bargaining representatives in each case) are also referred to in s 413(5)(a) and (b) (with the addition of “the employee” referred to in s 413(5)(b)).

79    The notice requirements of s 414 must have been met (i.e. before the industrial action occurs) (s 413(4)). That ensures a degree of specificity about the industrial action being notified because s 414(6) provides:

414    Notice requirements for industrial action

…

Notice requirements—content

(6)    A notice given under this section must specify the nature of the action and the day on which it will start.

80    The requirement in s 413(4) is located necessarily in the past (and is referred to in the past tense) because s 414 requires at least three days’ written notice of employee claim action and at least some written notice of employee response action or employer response action. Satisfaction of this condition must be in place when the industrial action in fact occurs for it to be protected industrial action.

81    I will pass over s 413(5) for the moment.

82    The person organising or engaging in industrial action must not contravene s 417 by organising or engaging in the industrial action (s 413(6)). This requirement is expressed in the present tense. As s 417 prohibits industrial action during the nominal term of an enterprise agreement, this states a temporal condition to be satisfied at the time the industrial action occurs.

83    Finally, none of the instruments specified in s 413(7) must be in operation. Those instruments (discussed below) operate inconsistently with the immunity afforded by s 415.

84    Division 6 of Part 3-3 of Chapter 3 deals (from s 423 to s 430) with suspension or termination of protected industrial action by the FWC. The premise is that protected industrial action is occurring. If that protected industrial action is suspended or terminated by an order of the FWC, then by s 413(7)(a), it no longer is protected industrial action for the purpose of the immunity given by s 415.

85    Section 431 (in Division 7) permits the Minister to terminate protected industrial action by declaration published in the Gazette. Then, by s 413(7)(b) it no longer is protected industrial action under s 415.

86    If protected industrial action is terminated by the FWC or by the Minister (and the negotiating period ends and the matters at issue are not settled), the FWC must, after a short period, step in and determine the outcome by making a “workplace determination” (s 266) which then operates as if it was an enterprise agreement (s 279).

87    A serious breach declaration, as referred to in s 413(7)(c), is a declaration made by the FWC under s 235(1). It may be made if there is a serious and sustained breach of a bargaining order. The provision, therefore, operates on past conduct in the same general territory as the operation claimed by the appellants for s 413(5), but its requirements are much more stringent. Section 235(2) provides:

235    When the FWC may make a serious breach declaration

…

(2)    The FWC must be satisfied that:

(a)    one or more bargaining representatives for the agreement has contravened one or more bargaining orders in relation to the agreement; and

(b)    the contravention or contraventions:

(i)    are serious and sustained; and

(ii)    have significantly undermined bargaining for the agreement; and

(c)    the other bargaining representatives for the agreement (the designated bargaining representatives) have exhausted all other reasonable alternatives to reach agreement on the terms that should be included in the agreement; and

(d)    agreement on the terms that should be included in the agreement will not be reached in the foreseeable future; and

(e)    it is reasonable in all the circumstances to make the declaration, taking into account the views of all the bargaining representatives for the agreement.

(Emphasis in original.)

88    On the construction of s 413(5) advanced by the appellants in the present case, it would operate more drastically and more extensively than s 235. An operation of that kind would render s 413(7)(c) irrelevant.

89    When a serious breach declaration is made, one consequence is that the FWC must also, after a short period, step in and determine the outcome by making a “workplace determination” (s 269) which then applies as if it was an enterprise agreement (s 279).

90    I may return one last time to the terms of s 413(5), which I will set out again for convenience:

413    Common requirements that apply for industrial action to be protected industrial action

…

Compliance with orders

(5)    The following persons must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement:

(a)    if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;

(b)    if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the employee and the bargaining representative of the employee.

91    The appellants, in their written submissions, posed the question “what is the purpose of section 413(5)?” The answer offered was as follows:

19    … It is submitted that the evident (and perhaps only) purpose of this provision is clear: if bargaining representatives, employers and employees comply with the rules governing bargaining and industrial action, they are entitled to the statutory privilege of protected industrial action, whereas if they break those rules, they lose that privilege.

92    I do not accept this contention. In my view, it seeks to introduce an extended operation for s 413(5) which goes beyond, and is foreign to, its purpose. In my respectful view, s 413(5) is concerned with an assessment of the particular industrial action which is being considered to see whether it meets the common requirements stated in s 413. In that context, what is relevant to establish, for the purpose of s 413(5), is whether organising or engaging in that industrial action has contravened an order which applies to the person concerned. Section 413(5), like s 413 as a whole, is in my view concerned with a contemporary “point in time” assessment as the primary judge found.

93    One matter addressed by s 413(5) is the identification of the persons whose conduct is to be assessed. For the industrial action, as or when it occurs, to be protected industrial action (s 413(1)) at that time (i.e. as it is in fact occurring or being organised) the identified persons must not have contravened orders applying to them. Unlike s 413(3), s 413(5) requires that if an employee is organising or engaging in industrial action the conduct of the employee (or those employees) is to be considered, as well as the conduct of bargaining representatives. None must have contravened orders applying to them. Those orders may relate to the agreement, may relate to industrial action in connection with the agreement or may relate to a matter that arose during bargaining (e.g. a requirement to meet with a stated frequency or exchange stated information – i.e. ongoing or concurrent requirements under a bargaining order). The orders being referred to have the common characteristic, in my view, that they must be current and operative – i.e. order(s) applying to the person(s) at the time when the industrial action is being organised or engaged in.

94    In my view, therefore, the effect of s 413(5) is that the identified persons must not have contravened any such orders when organising or engaging in the particular industrial action which is being assessed to see whether it is, or will be, protected (i.e. the orders must have ongoing significance with respect to, or have an operation in relation to, the industrial action under assessment). On the view which I take of s 413(5) it is concerned with orders which might bear directly upon organising or engaging in the industrial action under assessment for the purpose of s 415, s 418, s 420 and s 421. It is not concerned with matters more remote from that industrial action or with matters of history. Examples of orders which might engage s 413(5) would be an existing “stop order” under s 418 or s 420, an injunctive order under s 422 against pattern bargaining, or a bargaining order under s 230 imposing ongoing requirements about how bargaining should occur. Such orders do not separately fall within s 413(7).

95    It is relevant in this connection that the immunity given to industrial action which is protected industrial action is not absolute. It can be lost by contravention of an order during the currency of that industrial action. If, for example, a bargaining order requires a certain step to be taken at a moment during the industrial action, a failure to comply with the order will, in my view, render that industrial action (and any other protected industrial action in connection with the enterprise agreement) not protected for so long as the contravention occurs.

96    Bargaining orders, like other forms of order, are enforceable in their own right and separately from any operation of s 413. They do not depend for their effectiveness on being always connected with some future assessment of whether particular industrial action is protected industrial action. I respectfully disagree with Jessup J that s 413(5) is “concerned with contraventions … at any time in the past” rather than with compliance. Stop orders and injunctions against pattern bargaining (there may be other examples) are in a different category. Although they also are separately enforceable, defiance of them strikes directly at the contemporary character of the industrial action and bears upon the assessment of whether it is or will be protected under s 415. So also may defiance of a bargaining order with current requirements.

97    Accordingly, upon the view of s 413(5) which its terms suggest to me in the context in which they appear, only such orders as are relevantly prohibitory and operative at the time of organising and engaging in the particular industrial action will require consideration under s 413(5).

98    Criticisms of this approach were made in argument in both this appeal and another matter where it arose for consideration (see Esso Australia Pty Ltd v The Australian Workers' Union [2016] FCAFC 72, which is being handed down concurrently with the present judgment). It was argued in both matters that the construction I have suggested involves reading extra words into s 413(5) and is “too big” a step.

99    This contention was drawn from Taylor v The Owners - Strata Plan No 11564 (2014) 253 CLR 531 at [38] where French CJ, Crennan and Bell JJ said:

38        The question whether the court is justified in reading a statutory provision as if it contained additional words or omitted words involves a judgment of matters of degree. That judgment is readily answered in favour of addition or omission in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision. It is answered against a construction that fills “gaps disclosed in legislation” or makes an insertion which is “too big, or too much at variance with the language in fact used by the legislature”.

(Footnotes omitted.)

100    On the approach which I favour to the construction of s 413(5), if the identified persons (in (a) and (b)) and their activities are first “read into” the opening text of s 413(5), it becomes clearer that the focus of attention is properly upon the conduct of those persons as persons organising or engaging in the particular industrial action being assessed to see whether it is protected.

101    I accept, however, that my construction involves subordinating one view of the language of s 413(5) to the premise which, in my view, informs an understanding of its purpose and intended operation. To that extent, it may be correct to say that my construction assumes the opening phrase – “In organising or engaging in the industrial action, the following persons etc …”.

102    That, with respect, does not seem to me to be “an insertion which is ‘too big, or too much at variance with the language in fact used by the legislature’”.

103    Finally, the Explanatory Memorandum for the Fair Work Bill 2008 (Cth) (“the EM”) appears to support this approach to the construction of s 413(5).

104    The EM (in the “Regulatory Analysis” section) records:

Protected industrial action

…

r.284.    A pre-condition for taking protected industrial action will be that the participants are genuinely trying to reach agreement and are complying with any good faith bargaining orders in place.

(Emphasis added.)

105    Later, the EM explains:

Division 2 – Protected industrial action

Subdivision A – What is protected industrial action?

…

1631.    The distinction between protected industrial action and industrial action that is not protected is important due to the consequences that flow from the classification of the action. For example, FWA may order that industrial action that is not protected stop, not occur or not be organised. Also, only persons who organise or engage in protected industrial action are subject to immunity from certain legal proceedings. Industrial action is only protected if it meets all of the requirements set out in this Division.

106    The EM goes on to explain the nature of the structural change being made from the Workplace Relations Act 1996 (Cth) (“the WR Act”) which was being replaced by the FW Act, and the fact that earlier arrangements were being “consolidated”:

1632.    This Division consolidates the provisions that determine when industrial action is protected. In so doing, the Bill has ‘common requirements’ for all types of industrial action and specific requirements that relate to industrial action depending on whether it is taken by an employer or employees. These requirements must be met for industrial action to be protected, rather than ‘exclusions’ for when action is not protected (which is the framework in the WR Act).

107    It then identifies some structural features of the WR Act and goes on:

1634.    Under the Bill, these factors are preconditions for protected industrial action and not grounds for suspending or terminating a bargaining period (or protected industrial action).

1635.    This means that, for industrial action to be protected, a person must (among other things) be genuinely trying to reach an agreement, complying with any orders of FWA and not engaging in pattern bargaining. Failure to comply with these preconditions immediately exposes the person to the possibility of being subject to an FWA order to stop the industrial action.

(Emphasis added.)

108    In my respectful view, the focus on current compliance is unmistakable. It is the antithesis of the contention by the appellants that s 413(5) is concerned to bring to account any past contravention of any previously operative bargaining order, no matter how trivial or distant the contravention.

109    I accept that the statutory language lacks clarity, but construed with appropriate regard for the apparent legislative purpose to which s 413 is directed, in my view the appellants’ arguments should be rejected.

110    In my view, the common conditions stated by s 413, which are to be met if industrial action is to be protected industrial action as and when it takes place, are all ones which operate by reference to the particular industrial action which is being assessed to see if it is protected industrial action in a direct and immediate way. That is, as I have attempted to explain, the conditions all relate to, or impose, a contemporary requirement and not an historical one.

Conclusion on the appeal

111    I agree with the primary judge that, in the present case, the appellants did not make out a case for relief.

112    On the view which I take, the assessments required under s 413 (including s 413(5)), are not ones which can be satisfactorily undertaken in advance, as the appellants sought in the present case. Such assessments require a concrete body of facts, applicable at the time industrial action occurs, or is being organised, before the necessary judgments can be safely or satisfactorily made. The consequence of those judgments will often be far reaching, because they concern the immunity from suit given by s 415 and the operation of provisions such as s 418.

113    It was correct for the primary judge to have refused to make the declarations sought.

114    It follows that the appeal must be dismissed.

Associate:

Dated:    25 May 2016

REASONS FOR JUDGMENT

BROMBERG J:

115    I have had the benefit of reading the reasons for judgment of Buchanan J, with which I respectfully agree. I agree that the appeal must be dismissed.

Associate:

Dated:    25 May 2016