FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2015] FCAFC 25

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The declarations and orders made against the appellant on 2 December 2013 and 11 March 2014 be set aside.

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

REASONS FOR JUDGMENT

1    The Construction, Forestry, Mining and Energy Union (“CFMEU” or “union”) and BHP Coal Pty Ltd (“BHP”) were parties to a workplace agreement which was in force from 15 May 2008 until 15 May 2011. The agreement was made under the Workplace Relations Act 1996 (Cth) (“WR Act”) and its operation was continued by transitional provisions that accompanied the enactment of the Fair Work Act 2009 (Cth) (“FW Act”). The agreement (the BHP Coal Pty Ltd Workplace Agreement 2007) (“the 2007 Agreement”) relevantly applied to production and engineering employees who were members of the CFMEU and employed as mineworkers by BHP at its Peak Downs mine. It was a term of the 2007 Agreement that BHP could require its employees to work reasonable overtime (both rostered and unrostered), subject to prevailing operational requirements. Before the 2007 Agreement was made, the CFMEU had developed an overtime policy to the effect that employees should work no more than a certain amount of overtime in one week or 16-day cycle. In the proceeding below, BHP contended that by publishing and distributing documents which included this policy, the CFMEU had unlawfully banned employees from working in accordance with what BHP was entitled to require under the 2007 Agreement. BHP contended that, by this conduct, various provisions of the FW Act had been contravened.

2    The proceeding was brought against the CFMEU and four office-bearers of its Peak Downs Lodge (“Lodge”) (together “the union parties”). The four office bearers of the Lodge were Terry Low, the Lodge President, Rob Law, the Vice-President – Engineering, Kevin Adams, the Vice-President – Production, and Scott Leggett, the Secretary and Treasurer.

3    As against the CFMEU and Mr Leggett, BHP’s contentions were largely upheld. The primary judge found that BHP had proved all alleged contraventions bar one (the allegation that the union parties had contravened the 2007 Agreement in breach of s 50 of the FW Act). A major plank in the CFMEU’s argument – that there was no evidence that the policy was published or made available after the 2007 Agreement had come into effect (not to mention the passage of the FW Act under which the proceeding was brought) – was rejected on the ground that the policy was maintained after the 2007 Agreement was made. The primary judge relied on the evidence adduced by BHP alone as the CFMEU elected not to call evidence after BHP had closed its case.

4    In a separate judgment, the primary judge imposed a pecuniary penalty of $33,000, prohibited the CFMEU from publishing or otherwise implementing the overtime policy, and ordered that the union issue a written statement that the policy is unlawful and is withdrawn. She also ordered that the statement be signed by the current Lodge Executive and be issued to BHP and those of its employees at the mine who are union members.

5    In this appeal the CFMEU argued that the primary judge erred in multiple respects, both in coming to the conclusion that it had contravened the FW Act and in reaching her decision as to penalty. For the following reasons the appeal must be allowed.

The factual background

6    It is useful at this point to refer to some basic, undisputed facts.

7    The Peak Downs mine is a large, open-cut mine which operates continuously, that is to say, seven days a week, 24 hours a day. Most employees of BHP at the mine who are covered by the 2007 Agreement work seven day rosters. Their shifts incorporate rostered overtime, with the result that they regularly work shifts of up to 12½ hours’ duration. From time to time, where other employees are absent from work or when major works take place, they may also be called upon to undertake unrostered overtime.

8    The 2007 Agreement relevantly covered members of the CFMEU who were employed as mineworkers by BHP at seven mines, including Peak Downs.

9    The term of the 2007 Agreement which lies at the heart of the proceeding is cl 19.3. It read:

19.3    Reasonable overtime

In accordance with prevailing arrangements, employees may be required to work reasonable overtime.

The Company’s operational requirements continue to be such that overtime will be required on a regular and ongoing basis in accordance with the roster arrangements at the mine.

The Company will continue to endeavour to provide notice to employees of its overtime requirements through its rostering arrangements, but may require unrostered overtime to be worked in addition to their rostered overtime, subject to prevailing operational requirements.

10    Evidence was given on behalf of BHP that the phrase “subject to prevailing operational requirements” meant where there was a genuine operational need.

11    Clause 19.3 appeared in the previous workplace agreement, the BHP Coal Workplace Agreement 2004 (“2004 Agreement”), but it differed in its terms. It read merely:

19.3    Reasonable Overtime

An employee must work reasonable overtime, as required by the Company.

12    Before the 2007 Agreement was negotiated, the CFMEU had a policy limiting the working of overtime. No evidence was apparently called about when the policy was introduced or in what circumstances. The first evidence of the policy appears in the minutes of the District Convention of the CFMEU – Mining and Energy Division in November 1997. A resolution was carried there in the following terms:

That the 13 hours per week overtime limit remain as a general policy, however the District Executive is empowered to exempt, either in whole or in part, the Lodges from the operation of the policy based on any special circumstances which exist at a mine; provided adequate control measures are put in place by the Lodge to adequately address Health and Safety concerns; and taking account of the shift systems that are in place at the mine.

13    Documents produced by the Lodge, including minutes of its committee meetings, refer to the Lodge policy of one overtime shift per 16 days (of which eight are working days) for employees on a seven day roster (“the overtime policy” or “policy”). There was no evidence about when this became Lodge policy or how it differed, if at all, from the policy referred to in the minutes of the District Convention. It was common ground that BHP had not authorised either policy. Indeed, the evidence is to the effect that BHP was unaware of the policy until late March 2011.

14    In late March 2011 a supervisor in the maintenance service bay area of the mine (where about 28 employees worked) discovered a document on the notice board in the service bay crib room which referred to the overtime policy. The supervisor gave the document to Mark Stroppiana, the manager of human resources at the mine, who testified that, until then, he was unaware that the union had an overtime policy. It is reasonable to infer that it was the discovery of this document which caused BHP to bring this proceeding less than two months later. Before the trial, the CFMEU produced on discovery other documents which referred to the policy.

15    There was no evidence about whether any of the union’s documents which referred to a policy limiting overtime were concerned with rostered or unrostered overtime. The common assumption of the parties, however, was that all references were to unrostered overtime and the trial was conducted on that basis.

The legislative background

16    BHP alleged that the union parties had contravened the following provisions of the FW Act: ss 50, 340, 345, 349 and 417. Each of these provisions is a “civil remedy provision”.

17    Remedies were sought under Div 2 of Pt 4-1 of the FW Act. A person may apply for an order under Div 2 of Pt 4-1 of the FW Act in relation to a contravention of a civil remedy provision only if the application is made within six years after the day on which the contravention occurred (s 544).

18    Section 50 states that a person must not contravene a term of an enterprise agreement. It was not in contest that the 2007 Agreement was an enterprise agreement for the purposes of the FW Act.

19    Section 340, which appears in the general protections part of the FW Act (Pt 3-1), relevantly provides that a person must not take adverse action against another person because the other person has or proposes to exercise a workplace right. It also prohibits the taking of adverse action by one person against another person to prevent the exercise of a workplace right by the other person. The circumstances in which one person takes “adverse action” against another are set out in a table to s 342. Item 7 of the table refers to adverse action taken by an industrial association or an officer or member of the association against a person. Adverse action is taken in these circumstances if, amongst other reasons, the association, officer or member “(a) organises or takes industrial action against the person”.

20    “Industrial action” is defined in s 19(1) to include “(b) a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee…”.

21    It excludes, however, action by employees that is authorised or agreed to by their employer: s 19(2)(a).

22    Section 417 relevantly provides that an employee or employee organisation covered by an enterprise agreement or an officer of an employee organisation covered by the agreement, acting in that capacity, must not organise or engage in industrial action from the day on which the agreement is approved by the Fair Work Commission until its nominal expiry date has passed. It was common ground that the nominal expiry date of the 2007 Agreement was 16 May 2011.

23    “Workplace right” is defined in s 341 of the FW Act in this way:

(1)    A person has a workplace right if the person:

(a)    is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; …

(Original emphasis.)

24    An enterprise agreement is a workplace instrument as defined by s 12 of the Act.

25    The relevant “workplace right”, as pleaded in the statement of claim, was the right of BHP to require its employees to work unrostered overtime under the 2007 Agreement.

26    Where action is taken for more than one reason, for the purposes of Pt 3-1 the Act provides that a person takes action for a particular reason if the reasons for the action include that reason (s 360).

27    Section 361(1) provides:

361    Reason for action to be presumed unless proved otherwise

(1)    If:

(a)    in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and

(b)    taking that action for that reason or with that intent would constitute a contravention of this Part;

it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.

28    Section 345(1) provides that a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person or the exercise, or the effect of the exercise, of such rights. Section 349(1) provides that a person must not knowingly or recklessly make a false or misleading representation about another person’s obligation to engage in industrial activity. Neither subsection applies, however, if the person to whom the representation is made would not be expected to rely on it.

29    Section 363 relevantly provides that action taken by the committee of management of an industrial association, an officer or agent of an industrial association acting in that capacity or a member or group of members of the association if the action is authorised by the rules of the association, its committee of management or one of its officers or agents acting in that capacity, is taken to be action of the association unless in the latter case the committee of management, a person authorised by it or an officer of the association has taken all reasonable steps to prevent the action. If it is necessary to establish the state of mind of an industrial association in relation to particular action, it is sufficient to show that the action was taken by a person or a group referred to in the section and that the person or a person in the group had that state of mind.

The hearing below

30    The evidence consisted of a number of affidavits read by BHP. Three of the witnesses were required for cross-examination and so there was some oral evidence which, from the description in the primary judge’s reasons, appears to have been fairly brief. When BHP closed its case, the union parties submitted that there was no case to answer and elected not to call evidence.

31    In substance, the case for the union parties was that the contraventions as pleaded proceeded on the mistaken basis that there was one document relating to the amount of overtime that should be worked at the mine, but that in fact there were several documents, the terms of which were not identical; and that BHP had not proved to the requisite standard breach of any of the relevant provisions alleged in its statement of claim, for various reasons, including BHP’s failure to identify the time at which the alleged breaches occurred.

The decisions of the primary judge

32    In her first judgment (“the liability judgment”) the primary judge held that the CFMEU had an overtime policy limiting the hours of unrostered overtime that its members at the mine could work “referable to their shifts”. She found that the policy was outlined in three documents. One was displayed on a noticeboard in the crib room in the maintenance service bay area at the mine where about 28 employees work (“document 1”). Another was a document entitled “For your information” (“document 2”), sent to new union members under cover of an undated letter from Mr Leggett as Secretary/Treasurer of the Lodge. The third was a document entitled “For your information” (“document 3”), sent to new members under cover of an undated letter from Jim Valery, Queensland District Secretary of the Mining and Energy Division of the union.

33    With the exception of the word “some” in the third last sentence, which does not appear in document 2, and the use of the word “you” instead of “yourself” in the second sentence of document 2, each document contained the following statement:

Overtime Policy

There is a limitation placed on the amount of overtime you can work at Peak Downs. This helps us to get more new employees like yourself a job.

5 day roster – no more than 56 hours worked in one week.

7 day roster – one overtime shift per 16 day cycle.

There are some slight differences in some areas and if in doubt, ask your shift delegate. Each shift should have an OT roster to make sure every member has access to equal OT shifts. For more info see your delegate.

34    The two which were sent as part of the membership pack contained the following additional sentence:

If you are found in breech (sic), as per lodge policy, you may be made to donate extra payment to charity and you will be taken out of the OT roster for a set period.

35    All three documents were undated.

36    Her Honour rejected the argument put by the union parties that BHP’s pleading was flawed because it proceeded on the basis of one overtime policy document when there were “clear differences” between the three documents. She provided three reasons for doing so: first, that cl 18 of the statement of claim clearly pleaded that the policy was in three documents; second, that the only difference between the documents was the omission of a sentence in one of the documents; and third, that the omission of that sentence “did not result in either the misdescription by [BHP] of any overtime policy of the [CFMEU]” or a fundamental flaw, as alleged, in BHP’s case.

37    The primary judge was satisfied that the CFMEU issued all three documents. She found that the overtime policy outlined in the documents was a policy of “long standing” at the mine and that it had been promulgated to all new members of the union employed at the mine “over an indeterminate period of time”. She held that the policy was authorised by the union through the Lodge.

38    Her Honour rejected BHP’s contention that this conduct contravened the terms of cl 19.3 of the enterprise agreement and therefore s 50 of the FW Act, which provides that a person must not contravene a term of an enterprise agreement. She came to that conclusion because she was not persuaded that cl 19.3 imposed an obligation on the CFMEU which it could either satisfy or contravene. Assuming that the clause created a right in BHP, she said that on a plain reading of the clause she was not persuaded that the union contravened the agreement “by adopting an overtime policy which may impact on that right” (original emphasis). Noting that there was no evidence that any of the other union parties, all of whom were employees of BHP, had refused to work unrostered overtime, she found that they had not contravened cl 19.3 either.

39    But her Honour did find that the CFMEU had imposed an overtime ban, limitation or restriction and so had organised industrial action (within the meaning of s 19(1)(b) of the FW Act), contrary to s 417. She also found that the union had encouraged its members to apply the ban, limitation or restriction and rejected the submission by the union parties that there was no evidence that the overtime policy limited or restricted the performance of work at the mine. While she was satisfied that Mr Leggett, the fifth respondent, was involved in that contravention (see FW Act, s 550), she was not so satisfied in the case of any of the other three individual union parties.

40    The primary judge also held that BHP had a workplace right (to require employees to work unrostered overtime in prescribed circumstances), that “in respect of the overtime policy the [CFMEU] [had] organised or taken industrial action against [BHP]”, that this was “adverse action” within the meaning of s 342, and that the CFMEU had not discharged its onus of proving that the reason for the adverse action was not a reason proscribed by the FW Act. On the other hand, her Honour dismissed this part of the case against all four individual union parties, holding that none of them organised or took industrial action against BHP.

41    Finally, her Honour found that the overtime policy contained false and misleading representations concerning BHP’s right to require its employees to work overtime and concerning the obligation of BHP employees to engage in industrial action, that the CFMEU made those representations, and that it did so knowingly and/or recklessly in contravention of ss 345 and 349 of the FW Act. The finding in relation to knowledge/recklessness was based on the fact that the CFMEU was a party to the 2007 Agreement which contained cl 19.3 and on the evidence before the Court about the negotiations with BHP about cl 19.3, her Honour said that there was “no room for an interpretation of cl 19.3 which encompasses the limitation on unrostered overtime imposed by the overtime policy”. Her Honour also found against Mr Leggett on this question (having concluded that he promulgated a false and misleading statement when he sent the information pack to new members), but not against the other three individual union parties.

42    In her second judgment (“the penalty judgment”) the primary judge was persuaded that a pecuniary penalty should be imposed on the CFMEU because she inferred that it was a motive of the union in developing the overtime policy “to force [BHP] to hire more workers (including union members) rather than utilising the existing workforce, and thus increasing [BHP’s] costs”. She drew this inference from the statement in document 1, and in particular the words:

There is a limitation placed on the amount of overtime you can work at Peak Downs.

This helps us to get more new employees like yourself a job.

(Emphasis added by primary judge.)

43    Her Honour was satisfied, however, that the contraventions arose from a single course of conduct and that therefore a single penalty should be imposed. She said that the penalty should be substantial in order to deter the union and similar organisations from engaging in conduct of this kind, indeed, that it should be “at the higher end of the scale”, and concluded that the appropriate penalty was “the maximum which can be imposed for a single contravention”.

44    After referring to the various factors mentioned by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080, her Honour provided the following reasons. First, the overtime policy was a long-standing one at the mine with a wide circulation. Secondly, the policy was deliberately promulgated by the union through the Lodge, notwithstanding the terms of the agreement which the CFMEU had entered into with BHP after extensive and detailed negotiations. Thirdly, “while it [was] not possible to specifically identify the nature of loss suffered by [BHP] as a result of the overtime policy”, it was clear that BHP had a right to require employees to work unrostered overtime in circumstances contemplated by the agreement; the overtime policy unlawfully purported to restrict workers undertaking unrostered overtime as might be required by BHP “over an indeterminate time” and it was “reasonable to infer that union members worked in accordance with that policy”; and “although a purpose of the overtime policy may have been beneficial in respect of workers employed by [BHP]” she was “not persuaded by the submission of the union that it was not designed to cause any harm to [BHP]”. Fourthly, the CFMEU had exhibited no contrition and there was no evidence that it had taken any corrective action.

45    Her Honour was also persuaded to make the additional orders that BHP sought. She said that as the overtime policy was of long-standing at the mine, had received the approval of the Lodge on behalf of the union, and had been promulgated to new members of the union at the mine for an indeterminate time and was “in areas frequented by union members at the mine”, it was important that the union take positive action to ensure that its members were aware of the effect of the primary judgment. Her Honour described as “somewhat disingenuous” the union’s submission that there was no evidence that the overtime policy had ever been raised at the workplace with BHP or its employees at any time since the proceedings began. She said that “[o]ne might equally say that there is no evidence before the Court that the conduct of the union in promulgating the policy has changed or ceased since the proceedings began” (original emphasis).

46    Her Honour rejected the CFMEU’s submission that the proposed orders were not clear in their requirements of the union and the Lodge. She also rejected a submission from the union that the primary judgment alone would act as a sufficient deterrent “by alerting both the [union parties] and other unions for the first time that an overtime policy of this nature does not comply with Act”. She said that direct action by the union and especially the Lodge’s Executive to bring the effect of the primary judgment to the attention of the workers was necessary and justified.

The issues on appeal

47    The notice of appeal contains 20 grounds. In its submissions, however, the CFMEU identified 10 issues. They are:

(1)    whether the primary judge erroneously characterised the manner of the contraventions (ground 2 of the notice of appeal);

(2)    whether it was necessary for the primary judge to identify the time of the contraventions and, if so, whether it was identified (ground 1);

(3)    whether a Jones v Dunkel inference should have been drawn against the CFMEU based on its failure to call evidence and the consequence of such an inference for the imputation of liability (ground 5);

(4)    whether the finding that there was industrial action within the meaning of the FW Act was wrong (grounds 6–8);

(5)    whether the finding that BHP had a workplace right within the meaning of the FW Act to require reasonable unrostered overtime was wrong (ground 9);

(6)    whether, even if BHP had such a workplace right, the primary judge erred in finding that industrial action was taken because of that workplace right (ground 10);

(7)    whether the finding that the CFMEU had knowingly or recklessly made false or misleading representations was wrong (grounds 11–14);

(8)    whether the penalty judgment contained various errors (grounds 15–17);

(9)    whether the penalty was manifestly excessive (grounds 18–19);

(10)    whether the primary judge erred in ordering the CFMEU to issue a written statement signed by the current Lodge Executive (ground 20).

48    In ground 3 the CFMEU pleaded that the primary judge erred in finding that there was a single overtime policy based on the common parts of the documents containing that policy and then relying on parts of the documents that were not common. The CFMEU merely raised this as an argument in connection with the first issue.

49    In ground 4, the CFMEU pleaded that the primary judge erred in finding that the documents had been given or made available with the permission or knowledge of the Lodge office-bearers when the only evidence relied upon to support the proposition was the presence of Mr Leggett’s name on the undated covering letter in the membership pack. This proposition was mentioned in connection with the first, third, fourth and seventh issues.

The challenge to the liability judgment

Was the manner of the contraventions erroneously characterised (ground 2)?

50    The CFMEU submitted that the primary judge erroneously characterised the contraventions as the promulgation of the overtime policy rather than the publication or dissemination of the “overtime policy document”.

51    The primary judge’s finding was purportedly based on the pleading. With respect, this is, at least, a generous interpretation of the pleading.

52    The relevant parts of BHP’s pleading appear in paragraphs 14–19 of the statement of claim:

14.    The [CFMEU] has issued an “Overtime Policy” (the Document).

15.    The Document is entitled ‘CFMEU Mining & Energy Peak Downs Lodge: For your information’ and includes the logo of the [CFMEU].

16.    The Document states that there is a limitation placed on the amount of overtime that employees of [BHP] can work at Peak Downs, namely that employees working a 5 day roster cannot work more than 56 hours in one week and employees working a 7 day roster can only work one overtime shift per 16 day cycle.

17.    The Document states the limitation on overtime is to ‘help [the CFMEU] get more new employees like [BHP’s employees] a job’ and that ‘[e]ach shift should have an OT roster to make sure every member has access to equal OT shifts’.

18.    The Document has been given or made available by the [CFMEU], with the permission or knowledge of the Second, Third, Fourth and Fifth Respondents to all members of the [CFMEU’s] Peak Downs Lodge who are employees of [BHP] in that:

(a)    it is and was issued by the [CFMEU] to all new employees of [BHP] who are members of the [CFMEU];

(b)    it is and was displayed on a notice board in the Service Bay crib room at Peak Downs Mine.

19.    The Document is a direction made by the [CFMEU] to its members who are employees of [BHP] to limit the working of overtime as prescribed by the Document.

(Original emphasis.)

53    In para 23 BHP pleaded that it was by reason of the matters alleged in these paragraphs that the CFMEU and the Lodge office-bearers took adverse action against it by imposing or seeking to impose an overtime ban “as prescribed by the Document”.

54    Read on its own, para 14 is ambiguous. It could be a reference to the overtime policy which is merely defined as “the Document”, as BHP argued, or it could be a reference to a particular document which contains the policy, as the CFMEU contended. But when para 14 is read with the paragraphs that follow, it is tolerably clear that the allegation being made against the CFMEU in these paragraphs is that it had “issued” a document containing an overtime policy (the substance of which was stated in paras 16 and 17) by sending it to new members and by displaying it on the notice board in the crib room. And it is that conduct, that is to say, the issuing of the document containing the policy, which was alleged in para 23, to be adverse action. The pleading also proceeds on the erroneous assumption that the document posted on the notice board of the service bay crib room was the same document or at least identical in terms to the documents included in the membership packs.

55    The effect of s 551 of the FW Act is that BHP was obliged to comply with this Court’s pleading rules. At the time when the proceeding was instituted these were to be found in Order 11 of the Federal Court Rules 1979 (Cth).

56    Order 11 r 2(a) stated that a pleading “shall contain, and contain only, a statement in a summary form of the material facts on which [the party] relies, but not the evidence by which those facts are to be proved”. That prescription took up for this Court a longstanding requirement here and in the United Kingdom. It is repeated in the current rules of court but with the additional requirement that a party must state in a pleading such material facts as are necessary “to give the opposing party fair notice of the case to be made against that party at trial”: r 16.02(1)(d), Federal Court Rules 2011 (Cth). This addition made explicit what was always implicit in the earlier rules because of the Court’s obligation to afford parties procedural fairness. After they came into force, it was the new rules which governed any further steps in the present proceeding.

57    In relation to civil remedy proceedings, the FW Act does not contain a provision like s 251 of the Customs Act 1901 (Cth), which states:

No objection for informality

No objection shall be taken or allowed to any information, summons or other originating process for any alleged defect therein in substance or in form or for any variance between such information, summons or other originating process and the evidence adduced at the hearing in support thereof, and the Court shall at all times make any amendment necessary to determine the real question in dispute or which may appear desirable, and if any such defect or variance shall appear to the Court to be such that the defendant has been thereby deceived or misled it shall be lawful for the Court upon such terms as it may think just to adjourn the hearing of the case to some future day.

58    In practice, however, the absence of such a provision may be one of form rather than substance.

59    In Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 at 517 Isaacs and Rich JJ observed:

Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest.

60    These remarks were cited by the Full Court in Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356 at [52] upon which BHP relied. Betfair’s case at trial was that the imposition by the respondent of a fee for using NSW race field information contravened s 92 of the Constitution, which provides for freedom of interstate trade, commerce and intercourse. The primary judge dismissed the proceeding, holding that the fee did discriminate against Betfair, but that Betfair had not made out a case that the fee was “protectionist” in character so as to engage the operation of s 92 of the Constitution. The Full Court agreed and dismissed the appeal. In the course of its reasons, however, it expressed its disagreement with the primary judge’s conclusion that Betfair’s case was fatally flawed by its failure to adequately plead that the discrimination it alleged was of a protectionist kind. The Full Court held otherwise, saying at [55] that the primary judge gave “insufficient recognition to the fact that the case was fought out in every other sense on the constitutional issues arising from s 92”. The Court continued:

Betfair’s opponents sought to rely at the trial on the general proposition that Betfair would be “held” to its pleaded case. An announcement of that kind by a party misstates that party’s capacity to direct the course of the proceedings. The course of proceedings is in the control of the Court. That control is to be exercised for the attainment of a just outcome. There will obviously be cases where a pleaded case does not raise an important fact for attention. If that remains the position at the end of the case, the case may be lost on that basis, so far as it depends on that fact. Sometimes it would be unfair to allow a party to amend a case, or a pleading, to raise a new matter which could have been, but was not, raised earlier. On the other hand, mere infelicity of drafting will rarely be allowed to defeat a case on its merits if the merits of the case have been made apparent on the evidence without unfairness to the other party.

61    The Full Court emphasised the need to deal with the “real controversy” between the parties. At [59] the Court said that the question of protectionism was “clearly in play” and that any deficiency in the premise upon which the pleaded allegation of protectionism rested should have been dealt with as a matter of substance and not as a pleading point.

62    We accept that these principles apply to civil remedy proceedings. A contravention of a civil remedy provision is not an offence (FW Act, s 549). In proceedings of this nature s 551 of the FW Act requires the Court to apply the rules of evidence and procedure for civil matters.

63    Even so, a civil suit for the recovery of a pecuniary penalty is a proceeding of a penal nature: Naismith v McGovern (1953) 90 CLR 336 at 341. In this class of case, it is especially important that those accused of a contravention know with some precision the case to be made against them. Procedural fairness demands no less. Furthermore, although the civil standard of proof applies, where (as here) the resolution of an issue exposes a respondent to a penalty, satisfaction on the balance of probabilities is not achieved by “inexact proofs, indefinite testimony, or indirect inferences”: Briginshaw v Briginshaw (1938) 60 CLR 336 at 362. The Evidence Act 1995 (Cth) now requires that the court take into account the nature of the cause of action in deciding whether it is satisfied that a party’s case has been proved on the balance of probabilities: Evidence Act 1995 (Cth), s 140(2)(a) (“Evidence Act”).

64    Litigation is not a free for all. The overarching purpose of the civil practice and procedure provisions that apply in this Court is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible (Federal Court of Australia Act 1976 (Cth) (“FCA Act”), s 37M). It would not be just to decide a case on a different basis than the way it was conducted. Nor would it be just to permit an applicant to change the nature of its case after the evidence has closed and its weaknesses pointed out, at least not without a formal application and the grant of leave, on terms if necessary.

65    The long and the short of it, then, is that, in a civil proceeding of a penal nature, a statement of claim must allege a contravention known to law and with a sufficient statement of material facts to alert a respondent to the case to be met. Nevertheless, where an applicant’s pleading is ambiguous but a respondent has nonetheless meaningfully engaged with it in its defence, that engagement and the manner in which an applicant’s case is consequentially opened and the trial conducted and defended can and ought to be considered in deciding whether a respondent has suffered any procedural unfairness. That is so even if there has been no formal application to amend the pleading. The obligations imposed on the Court and the parties by Pt VB of the FCA Act do not lead to any different conclusion.

66    So was the case conducted on the basis that the contraventions were not confined to the issuing of the documents?

67    BHP submitted that it was. It pointed to their outline of submissions which was served before the hearing. In particular, it drew the Court’s attention to paras 13–18 of those submissions:

13.    In or about March 2011 it came to the attention of senior management of the applicant at the Peak Downs Mine that the first respondent had issued an "Overtime Policy" contained within a document entitled "CFMEU Mining and Energy Peak Downs Lodge, For Your Information" which included the logo of the first respondent.

14.    The "Overtime Policy" stated that: "There is a limitation placed on the amount of overtime that [employees of the applicant] can work at Peak Downs". It specified that employees working a five-day roster cannot work more than 56 hours in one week and employees working a seven-day roster can only work one overtime shift per 16 day cycle.

15.    The "Overtime Policy" stated that the limitation on overtime "helps [the first respondent through the Peak Downs Lodge] get more employees like [the applicant's employees] a job". It goes on to state that each "shift should have an OT roster to make sure every member has access to equal OT shifts".

16.    The "Overtime Policy" was given or made available by the first respondent, with the permission or knowledge of the second, third, fourth and fifth respondents, to all members of the first respondent's Peak Downs Lodge who are employees of the applicant in that:

(a)    it was issued by the first respondent to all new employees of the applicant who are members of the first respondent, forming part of the first respondent's "Membership Pack" issued to new members;

(b)    it was displayed on a notice board in the service bay crib room at Peak Downs Mine;

(c)    it reflects the first respondent's Queensland District Branch's Convention ratified policy of imposing an "overtime limit";

(d)    its monitoring was the subject of discussion at committee meetings of the Peak Downs Lodge of the first respondent.

17.    The "Overtime Policy" constitutes a direction made by the first respondent to its members who are employees of the applicant to limit the working of overtime as prescribed by the document in that it expressly places a specified limitation on the amount of overtime a person can work. Further, as per the "Membership Pack", the first respondent threatened financial penalties or removal from the overtime roster as sanctions for breach of the "Overtime Policy".

18.    The limitation imposed by the "Overtime Policy" was inconsistent with the capacity of the applicant under Clause 19.3 to require its employees to work unrostered overtime.

(Citations omitted.)

68    The focus of the oral opening at trial was also on the policy, rather than the documents. BHP drew attention to three passages where it had made the following points:

    That “what brings us to the court is the discovery in March 2011, of a document which set out what is described as the policy of the Peak Downs Lodge, with regard to the working of overtime”;

    There was evidence that the Peak Downs Lodge had “always” had an overtime policy, which had not been rescinded;

    The document that came to the attention of BHP in March 2011 was headed “CFMEU Mining and Engineering, Peak Downs Lodge” and carried the union’s logo. Reference was then made to the contents of the document and to the proposition that BHP would argue that the reference in it to 56 hours of work in one week for the five-day roster and one overtime shift per 16 day cycle for the seven-day roster represented the policy of the Lodge;

    There did not seem to be any dispute that the overtime policy has been applied in practice;

    Upon becoming aware of the policy, BHP commenced the proceeding;

    The issues regarding s 417 (of the FW Act) were “whether the policy constitutes industrial action, and whether the policy is a policy of the Union”.

69    BHP also informed the Court during the opening that “[t]he other issue will be – assuming it is a policy of the Union – is it industrial action, and we will argue ultimately that it’s a ban on the performance of work”. Plainly, understood in context, the pronoun “it” was a reference to the overtime policy, not the publication of the document.

70    So was the position clear? Is the CFMEU being disingenuous? What did it plead in its defence and how did it conduct itself at the hearing?

71    The union parties filed a single defence.

72    In relation to para 14 of the statement of claim they admitted that there was a document which was displayed on a notice board in the crib room of the service bay at the mine which included a heading “Overtime Policy” but denied that the document constituted a policy issued by the CFMEU.

73    They also admitted the facts alleged in paras 15–17 of the statement of claim and said that “the words in the document reflect the view of the members of the [CFMEU] engaged by [BHP] as to the appropriate level of overtime that should be worked at the workplace.”

74    As to para 18 of the statement of claim the union parties admitted that “the document is and was displayed on a notice board in the Service Bay crib room at Peak Downs Mine.”

75    Otherwise they did not admit the facts alleged in that paragraph and they denied the allegation in para 19.

76    In its written submissions in response to the no case submission, however, BHP asserted that its case was “not limited to the document that was found in the service bay crib room”, being a document “which set out the terms of overtime policy”:

Rather, [BHP] alleges that there was an overtime policy in operation, and the promulgation of this overtime policy by the [union parties] through various means (including, but not limited to, the publication of the policy, through a document pinned up in the service bay crib room), resulted in various contraventions of the FW Act by each of the [union parties].

77    This submission, though not entirely in accordance with the pleading, was consistent with the way the case was opened. Although BHP’s statement of claim proceeded on the inaccurate basis that the union parties had promulgated the overtime policy by distributing one document, it was clear from BHP’s submissions that its argument was that the union parties had promulgated the overtime policy by distributing a number of documents. In the result, there was no procedural unfairness to the CFMEU. The case the primary judge decided was the case BHP ran. While BHP should have amended its pleading to conform to the case it was presenting (to clarify that there were three documents, rather than just one, which referred to the overtime policy), the CFMEU did not raise any objection that the case as opened went beyond the pleading and that it was prejudiced on that account. It is reasonable to infer from this that the CFMEU understood at the time that BHP’s case was the case it put in those submissions. We are not therefore persuaded that the primary judge erred in her characterisation of the alleged contraventions.

78    It follows that ground 2 of the notice of appeal should be dismissed.

Was it necessary for the judgment to identify the times of the contraventions and, if so, were they identified (ground 1)?

79    The CFMEU contended that the primary judge erred by finding that the FW Act had been contravened without specifying when the contraventions took place. It argued that, in order for there to be a contravention, it was necessary that the conduct occurred after 1 July 2009 (the date the FW Act came into force). It pointed to the fact that the FW Act provides a time limit on applications (in s 544), which, it submitted, assumes that a day of contravention is identified. It argued that a respondent could only properly deal with an allegation that a civil remedy provision of the FW Act has been contravened if both the manner and the time (by which we understand them to mean the date) are identified. It relied upon both the failure of BHP’s pleading and the failure of the primary judge to identify the period of contravention.

80    BHP asserted that its statement of claim did identify the dates of the alleged contraventions. BHP did not contend that the primary judge made a finding identifying the period of contravention. Its submission was premised on the basis that it was sufficient for the primary judge to have made a finding that the contravening conduct occurred after 1 July 2009. It submitted that the primary judge was entitled to find that the policy existed after the FW Act came into force on 1 July 2009 and that it was open on the evidence for the primary judge to have found that the contravening conduct occurred after that day.

81    We reject BHP’s contention that on a fair reading of its statement of claim the contravention took place in May 2011 because of the use of the present tense of the verb “to be” in paragraph 18 (“it is … issued”). However, even if that were accepted, para 18 also speaks to the past (“was issued”). A fair reading of that paragraph suggests that it was alleged that the policy had been and was being communicated by the CFMEU to the members of the Lodge over a period of time, that period being ongoing at the time the proceeding was commenced. There is nothing in the pleading which identified (or even suggested) when the period in question, and thus the alleged contraventions, commenced. The fact that each of the provisions of the FW Act relied upon came into force on 1 July 2009 says nothing as to when, on or after that date, BHP alleged the contraventions commenced. The statement of claim failed to identify any specific or even approximate date. BHP’s statement of claim was clearly defective in that respect.

82    When it made its no case submission, the CFMEU relied on that defect. It contended that it was fundamental to a finding of a breach of a civil remedy provision that the time of the breach be identified.

83    In Johnson v Miller (1937) 59 CLR 467 at 486 Dixon J considered that it was necessary for the complaint to specify the time of an offence. In our view a respondent to an allegation of a contravention of a civil remedy provision is also entitled to know when the contravention is alleged to have taken place in order to know with precision the case it is called upon to meet. As we have said above [at 63], this is an incident of procedural fairness. Moreover, unless a finding is made as to when a contravention occurred, a respondent may be penalised for conduct which occurred before the provision in question was enacted or for conduct which occurred beyond a statutory limitation period. Further, the extent of time over which a contravention occurs will have a bearing on penalty.

84    The primary judge did not make any findings which identified the date or period over which the contraventions she found occurred. Nor do the declarations of contravention specify any date or period.

85    Contrary to BHP’s submission, the primary judge did not make a finding that the contravening conduct took place after 1 July 2009. The closest her Honour came to making a finding concerning the times of the contraventions was when she found that the policy was maintained after the making of the 2007 Agreement. At [127], the primary judge expressed her view that the CFMEU had “clearly maintained the policy in the face of that Agreement”. The 2007 Agreement was operative from May 2008. A finding that the policy was maintained in the face of the 2007 Agreement is inconclusive as to whether the contraventions occurred after 1 July 2009.

86    In any case, to the extent that the findings of contravention by the union (or for that matter, Mr Leggett) were based on the letters in the maintenance pack, the error is particularly stark. The letters are undated and there was no evidence to indicate whether they were sent after the commencement of the FW Act. Indeed, at [87] her Honour found that the policy had been promulgated to new members “over an indeterminate period of time”, signifying that she was unable to say when the letters were sent.

87    Putting aside the procedural fairness considerations which, in our view, required that the statement of claim specify the dates of the alleged contraventions, it was critical to the primary judge’s task that she be satisfied that the impugned conduct occurred on or after 1 July 2009 and that findings to that effect be made. The omission of such findings means that none of the findings of contravention can stand.

88    BHP submitted that the evidence was nonetheless sufficient to support an inference that the policy existed after 1 July 2009. We reject the submission. To understand why, it is necessary to appreciate that the existence of the policy on and after 1 July 2009 was not of itself sufficient to constitute a contravention.

89    In the case of the alleged contravention of ss 345 and 349, it was necessary for BHP to have established that the policy was communicated to employees at a particular time on or after 1 July 2009.

90    As we will later explain, in the case of the alleged contraventions of ss 417 and 340, (which relied upon a finding that “industrial action” by way of a ban was taken or organised), the contraventions alleged were misconceived because, without more, the communication of the policy to union members could not have constituted “industrial action” taken by the CFMEU, and in the absence of industrial action taken by employees, the CFMEU could not have organised industrial action.

91    However, even if that conclusion is wrong and, as the primary judge held, a communication that purported to be “at least hortatory, if not authoritative and binding, upon the person[s] to whom [the communication was] directed” (Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Laing (1998) 89 FCR 17 (“Laing”) at 30-31 (French J)) could constitute “industrial action”, it was necessary for the primary judge to have found that on or after 1 July 2009 the CFMEU communicated the policy to its members by way of the imposition of a ban, that is, in a manner which was at least hortatory if not authoritative and binding. The primary judge did not make a finding that a communication of that character was made on or after 1 July 2009 and the evidence does not support an inference that it was.

92    The evidence that BHP relied upon was as follows:

(a)    The admission by the union parties that there is a document on a notice board in the service bay crib room at the mine which included a heading “Overtime Policy”;

(b)    The admission by the union parties as to the contents of the overtime policy and the statement in para 4 of the defence that the words in the document (document 1 again) reflect the view of union members as to the appropriate level of overtime that should be worked at the workplace;

(c)    The further and better particulars of the admission in para 4 of the defence in which the union parties said:

On 4 November 1997, there was a resolution carried at the Queensland District Board of Management meeting that 13 hours per week overtime limit remain as a general policy. In or about 1998, there was a monthly meeting of the Peak Downs Lodge in relation to the Queensland District overtime policy. The Peak Downs Lodge endorsed the District policy of an overtime limit of 13 hours each week. That resolution adopted the position that at Peak Downs mine the policy amounted to overtime being limited to one shift of overtime in 16 shifts.

(d)    No particulars were given to indicate that the endorsement of the District policy referred to above had ever been amended or withdrawn.

(e)    The Lodge policy of one overtime shift per 16 shifts is recorded in the minutes of the monthly meeting of the Peak Downs Lodge on 8 and 12 February 2011 and the requirement for monitoring of overtime at one in every 16 days is recorded in (the minutes of) a committee meeting of the Lodge on 27 April 2010.

(f)    The policy was contained in the notice posted on the notice board in the service bay crib room which was seen in March 2011.

(g)    The substance of the policy was contained in the new members’ pack;

(h)    Robert McCreadie, the superintendent of pre-strip at the mine, gave evidence to which the primary judge referred, that on many occasions workers would say to him that they had already worked one overtime shift and could not do another because it was against union policy.

93    The particulars referred to in subpara (c) above were given in answer to the following question:

Provide the usual particulars and the usual details of why the [union parties] say that the words in the document reflect the view of the members of the [CFMEU] engaged by [BHP] as to the appropriate level of overtime that should be worked at the workplace, including:

(a)    The names of the members who hold this view;

(b)    The time at which the members held this view; and

(c)    How each of the [union parties] is aware that the members hold this view.

94    The admissions and particulars referred to above in subparas (a) and (b) respectively were references to paras 3 and 4 of the defence, which read as follows:

3    As to paragraph 14 of the Statement of Claim, the [union parties] say that there is a document which is displayed on a notice board in the Service Bay crib room at the Peak Downs Mine which includes a heading “Overtime Policy”. The [union parties] further say that the Document does not constitute a policy issued by the [CFMEU].

4    The [union parties] admit the facts alleged in paragraphs 15, 16 and 17 of the Statement of Claim and say that the words in the document reflect the view of the members of the [CFMEU] engaged by [BHP] as to the appropriate level of overtime that should be worked at the workplace.

95    In effect, these admissions are that document 1 was displayed on a notice board in the service bay crib room at the time the defence and/or the statement of claim was filed in 2011 and that the words in the document reflect the view of the union’s members employed by BHP as to the appropriate level of overtime that should be worked at the workplace. They are not admissions that the union took any action to publish or distribute its policy at that time. It was not enough for BHP merely to show that union members had a view about what level of overtime should be worked.

96    The resolution referred to in [92(c)] above does not take the matter any further. Having regard to the request to which the particulars given were a response, no inference can be drawn from the absence of further particulars.

97    As to [92(f)], there was no evidence as to when document 1 was placed on the notice board in the crib room or by whom and, in particular, whether it was placed there on or after 1 July 2009 and whether it was placed there by an officer, employee or agent of the union. For all we know the document could have been on the notice board for years (well before the FW Act came into force) and placed there by someone not associated with the union.

98    The inference that BHP contended for is not assisted by the evidence that there were a number of union notice boards and at least ten crib rooms at the mine and none but the notice board in the service bay crib room displayed document 1. Only 28 employees worked in the service bay area out of 849 employees and 893 contract workers at the mine.

99    As to [92(g)], the documents contained in the new member’s packs were undated and there was no evidence as to when, if at all, those documents were distributed. Although there was evidence that BHP employed new employees, the Court was not taken to any evidence to show that the Lodge gained any new members after 1 July 2009.

100    As to [92(e)], the minute of a Lodge Committee meeting held on 27 April 2010 included the following comment:

“OT needs to be monitored @ 1 every 16 days”.

There was however no evidence as to who voiced that concern or that anything was done to give effect to it.

101    In February 2011 the Lodge held two meetings with members of four crews: the first involving crews B and C; the second, crews A and D. The minutes of those meetings contain the following notes:

Overtime

•    Lodge policy is 1 overtime shift per 16 shifts

•    Was discussed from the floor that union members should do more as contractors are hooking in.

•    Who’s watching contractors hrs?

…

General Business

•    …

•    Who’s looking at contractor hrs, we should be doing it instead, they are forever doing It (need feedback)

•    Tank asked who was willing to do unlimited overtime

o    3 for unlimited

o    10 for none ever

o    The rest for leave it the way it was

•    Pumps has 9 Connie’s and 2 perm so how’s perms not doing overtime going to get people employed when Connie’s more than willing to do it. Same across a lot of departments. Field crew/Plant etc (need feedback)

•    Essential services, it’s not in the agreement anywhere, do we have to do it? (need feedback)

•    …

102    This evidence shows that there was a discussion about the policy and a division of opinion about the working of unlimited overtime.

103    It may be inferred that the Lodge policy on overtime was discussed at meetings in April 2010 and February 2011. But BHP did not allege that the union parties had contravened the FW Act by communicating the overtime policy at union meetings or by publishing minutes that referred to the overtime policy. Its case as to the communication of the policy was confined to the dissemination of documents 1, 2 and 3.

104    Further, whilst it may be inferred from the discussion recorded in the minutes that as at April 2010 and February 2011 the policy was extant (a fact which the CFMEU did not dispute), that evidence does not sustain to the requisite standard an inference that as at April 2010 or February 2011, or at any other time after 1 July 2009 the CFMEU was imposing the policy as a ban. The minutes largely record various comments made by one or more attendees. They do not record any resolutions. There was no evidence to establish the currency, as at April 2010 or February 2011, of the hortatory statements associated with the policy that the primary judge referred to and relied upon at [105] and [106] of her reasons. Her Honour there relied on the following statements in the documents: “There is a limitation placed on the amount of overtime you can work at Peak Downs”; and “If in doubt, ask your shift delegate”. And the following statement, which appeared only in the documents in the membership pack: “If you are found in breech [sic], as per lodge policy, you may be made to donate extra payment to charity and you will be taken out of the OT roster for a set period”. She described this statement (at [106]) as “punitive”. There is however no basis upon which to infer that these statements were made on or after 1 July 2009.

105    Further, the evidence of the limited distribution of document 1 and the absence of any evidence that at any time after 1 July 2009 BHP had encountered any resistance from employees when it had required overtime to be worked, tell against the conclusion that the CFMEU was imposing a ban. As we later explain, the evidence referred to in [92(h)] did not establish that any refusal or reluctance to work overtime expressed by employees occurred on or after 1 July 2009.

106    Ground 1 of the appeal should therefore be allowed.

Was the finding about industrial action wrong (grounds 6–8)?

107    Having regard to the conclusions we have reached on ground 1, it is strictly unnecessary to deal with the remaining grounds. We do so, however, lest those conclusions be wrong.

108    It will be recalled that s 417 of the FW Act relevantly prohibits an employee organisation covered by an enterprise agreement or an officer of that organisation acting in that capacity from organising or engaging in industrial action before the nominal expiry date of the agreement has passed.

109    The primary judge made two findings in relation to the CFMEU’s involvement in “industrial action”. The first related to the claim that the CFMEU had contravened s 417 of the FW Act. In that respect, at [104] of her reasons, the primary judge found that the CFMEU had “organised” industrial action “in that it has imposed an overtime ban, limitation or restriction…”.

110    The second finding about the CFMEU’s involvement in industrial action was made in the course of dealing with the claim that the CFMEU had contravened s 340 of the FW Act. At [125], her Honour found that “adverse action” was taken by the CFMEU because, for the reasons she explained in relation to the s 417 finding, her Honour was satisfied that the CFMEU had “organised or taken industrial action” within the meaning of “adverse action” as specified in Item 7 Column 2 of s 342(1).

111    According to the CFMEU, the errors in her Honour’s findings that industrial action occurred were that:

(a)    there was no “industrial action” within the meaning of s 19(1) because neither the overtime policy nor the documents referring to it were industrial in character in that they stood “completely outside the area of disputation and bargaining” (referring to Police Federation of Australia v Victoria Police/Chief Commissioner of Police [2014] FWCFB 2063 and Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v The Age Company Limited, PR946290; [2004] AIRC 445 (“The Age case”)), there being no evidence that the policy had been raised in that context;

(b)    there was no “industrial action” as the documents were not authoritative or hortatory because they were not made available to all members and were no more than a “paper policy”;

(c)    alternatively, cl 19.3 of the agreement imposed a limit on the amount of unrostered overtime (in that it was subject to prevailing operational requirements, and it had to be reasonable and in accordance with prevailing arrangements at the mine) and there was no evidence that the limit imposed by the union was contrary to cl 19.3 (that is, no evidence that it was unreasonable or not in accordance with prevailing arrangements at the mine or prevailing operational requirements); and

(d)    there was no evidence to support the finding at [109] that employees who were willing to work reasonable unrostered overtime were limited by the overtime policy and declined to do so.

112    In the context of the contention in sub-para (d), an issue arose on the hearing of the appeal about whether the communication by the CFMEU of a ban, restriction or limitation on the performance of work by employees could constitute the CFMEU either engaging in or organising “industrial action” where the ban was not implemented by the employees to whom the communication was directed. BHP contended (both orally and in written submissions in reply) that the communication of the ban was sufficient and that evidence of its implementation by employees was unnecessary. We will address that matter below noting, in fairness to the primary judge, that the issue was not canvassed at trial.

Was the promulgation of the overtime policy “industrial” in character?

113    The CFMEU relied on the note in s 19 of the FW Act for its submission that the promulgation of the policy did not constitute “industrial action”.

114    The note in s 19 of the FW Act reads:

In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v The Age Company Limited, PR946290, the Full Bench of the Australian Industrial Relations Commission considered the nature of industrial action and noted that action will not be industrial in character if it stands completely outside the area of disputation and bargaining.

115    According to the Explanatory Memorandum to the Fair Work Bill 2008 (Cth), the note was included in the Act “to clarify that the definition of industrial action is only intended to cover actions that have an industrial character and occur within the area of disputation and bargaining”: cl 90. The note is part of the FW Act: see Acts Interpretation Act 1901 (Cth), s 13. The Acts Interpretation Act applies to all Acts, subject to any contrary intention (s 2). The note must therefore be taken into account in determining the meaning and scope of the words in s 19.

116    In the case referred to in the note, The Age case, the Full Bench relevantly held at [46]:

It seems to us likely that the legislature did not intend to include conduct which stands completely outside the area of disputation and bargaining and that accordingly the definition should be read giving some weight to the word industrial. But precisely how far this qualification might extend is a question of degree. We do not think it is desirable that we go further than is necessary to decide this case. As is clear, we have not found it necessary to go beyond the words of the definition.

117    The Full Bench’s comments are best understood in the context in which they were made. At [44]–[45], the Full Bench remarked:

44.    Just as employer conduct is capable of different characterisations depending upon the context, so also is employee conduct. An employee who does not attend for work on account of illness may not be engaging in industrial action, while an employee who does not attend for work in support of a collective demand that the employer agree to alteration of the conditions of employment clearly is so engaged.

45.    In a statutory context which is concerned with industrial disputation and enterprise bargaining it might fairly easily be concluded that a definition of industrial action is intended to be confined to action which occurs in the course of an industrial dispute or bargaining in relation to a demand concerning the conditions to be afforded by an employer to its employees. If such were the case, however, as counsel for the unions pointed out, so-called political strikes may not be amenable to an order pursuant to s.127 – a conclusion at odds with a number of Commission decisions and with the decision of the Federal Court of Australia in [Laing].

(Citations omitted.)

118    The note in s 19 of the FW Act indicates that the legislature intended The Age case to guide the determination of whether action is “industrial action”. But the fact that a note is part of the Act does not mean that it can govern the meaning of the Act. This is particularly the case here because, contrary to what is suggested by the note in s 19, the Full Bench did not hold that action would never be industrial in character if it stood outside the area of disputation and bargaining. As the Full Bench observed in The Age case, political strikes constitute such action. In Laing French J observed at 31:

Industrial action may be caught by the section notwithstanding that it is intended to send a signal or communicate some message other than about a dispute with the employer. It is not necessary for the application of s 127 [of the Workplace Relations Act 1996 (Cth)] that it relate to an industrial dispute if it relates to work regulated by an award or a certified agreement. Thus employees might stop work without the authority of their employer and in breach of their contract of employment in order to attend a rally at Parliament House or some other form of demonstration or public meeting to express views about some issue not arising out of their relationship to their employer. In such a case where their work is regulated by an award or a certified agreement, s 127 is capable of application.

119    These comments were made in relation to the WR Act, but the definition of “industrial action” in the FW Act is not relevantly different.

120    Ultimately, the question posed by s 19(1) of the FW Act is whether action can be said to be “industrial” in character. If action takes place outside the area of disputation and bargaining, that is relevant in determining whether the action is “industrial”, but it is not determinative.

121    In this case, the action the CFMEU was found to have organised was industrial in character. One purpose or motivation of the impugned conduct appears from the documents to be directed towards putting pressure on the employer to hire more employees. The limitation placed on overtime at Peak Downs is expressed as helping the union “to get more new employees like [yourself] a job”. That is an industrial agenda. The policy was also intended to affect the performance of work: cf. Laing at 31–32. We doubt whether it is also necessary to show that the relevant action occurred within the process of bargaining and disputation around the agreement. If it be necessary, we accept that there was no evidence that the overtime policy was mentioned during negotiations for the agreement. But the circumstances in which overtime could be required were part of the bargaining process.

122    This part of the CFMEU’s argument should be rejected.

Was the overtime policy “no more than a paper policy”?

123    The second plank of the CFMEU’s argument that there was no “industrial action” rested on the notion that the overtime policy was “no more than a paper policy” (that is, not actually implemented or authoritative in practice), and that this conclusion was supported by the absence of evidence that employees were restricted by the policy. The CFMEU submitted that the overtime policy was not authoritative or hortatory. It submitted that the evidence showed that the documents containing the policy only went to a small number of employees.

124    While the documents may have gone to only a small number of employees, they emanated from a governing body of the union. No doubt, union members were expected to comply with union policy and the policy was plainly intended to apply to all union members. To that extent it was authoritative. Furthermore, the policy, as described in all three documents, was couched in authoritative language. That description begins with the emphatic assertion that “there is a limitation placed on the amount of overtime you can work …”. We therefore reject the proposition that the overtime policy was “no more than a paper policy”.

Was there evidence to support the finding that employees who were willing to work reasonable unrostered overtime were limited by the overtime policy and declined to do so?

125    Assuming it to be relevant, there was insufficient evidence to support the finding at [109] that employees who were willing to work reasonable unrostered overtime were limited by the overtime policy promulgated by the CFMEU and declined the opportunity to do so where the overtime policy was in danger of breach. In the course of her judgment, the primary judge referred to evidence from two witnesses: Robert McCreadie, who was a former superintendent in the pre-strip area of the mine, and Michael Schafferius, a former CFMEU area delegate in that area.

126    According to her Honour’s summary at [31], Mr McCreadie said that on many occasions workers would state to him that they had already done one shift of overtime and that they could not do another shift of overtime because that was against union policy. Mr McCreadie would typically respond to the employees that they worked for BHP and not the CFMEU.

127    This evidence, which was apparently admitted without objection, would give rise to an inference that the workers to whom Mr McCreadie had spoken knew of the union policy. Without more, however, it does not show that employees who had been asked to work reasonable unrostered overtime refused to do so. It assumes, but does not prove (if it were necessary to do so), that in all or any of these cases it would have been reasonable in the circumstances to require the employees in question (none of whom was identified) to work an additional unrostered overtime shift. The Court was not taken to any evidence from which such an inference could be drawn. In any event, in the absence of any evidence as to when the conversations took place, it was entitled to no weight. In particular, the evidence was insufficient to enable the Court to come to a conclusion about whether the CFMEU had taken any steps to communicate or enforce the policy after 1 July 2009. That is because Mr McCreadie’s evidence was that he worked at the mine from December 2004 until July 2011 and he was never asked, nor did he volunteer, when, during that period, any of these conversations occurred.

128    Mr Schafferius said that the CFMEU’s overtime policy would frequently be discussed at monthly committee meetings of the union at the Peak Downs mine. He also said that the policy discussion “was in the context of the union determining how it would deal with employees who were working too much overtime” and that, as area delegate, the Lodge executive expected him to enforce the overtime policy and require employees who did any extra overtime shift to give the money that they earned to charity. Once again, however, no particulars were given of the occasions upon which the overtime policy was discussed at these meetings. But the major problem with this evidence is that Mr Schafferius left the mine in 2006.

129    To the extent that the evidence before the Court might be thought sufficient to support a finding that employees who wanted to work reasonable unrostered overtime were limited by the CFMEU’s overtime policy and declined to work overtime when it was offered, that evidence was “inexact proof” in the Briginshaw sense because it did not indicate whether that occurred before or after 1 July 2009.

130    However, the absence of this evidence was not, as we perceive the primary judge’s approach, decisive to the primary judge’s findings that the CFMEU had taken and organised “industrial action”. Although she does not say so expressly, her Honour proceeded on the basis that it was not necessary for BHP to establish that employees took any “industrial action”. It is to that issue that we turn next.

Did the communication by the CFMEU’s of its policy to its members constitute “industrial action”? If not, could the CFMEU have organised “industrial action” when none was taken by the employees?

131    BHP did not allege that any of its employees had taken industrial action. The allegations that the CFMEU contravened each of ss 340 and 417 of the FW Act were based upon the conduct pleaded at paras 14-19 of the statement of claim, namely, promulgating and communicating the policy to the members of the Lodge through documents 1, 2 and 3.

132    Subject to s 19(2), the terms of which are not relevant for current purposes, s 19(1) of the FW Act defines “industrial action” in the following way:

Industrial action means action of any of the following kinds:

(a)    the performance of work by an employee in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of the work;

(b)    a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee;

(c)    a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work;

(d)    the lockout of employees from their employment by the employer of the employees.

(emphasis added)

133    It is apparent from the terms of s 19(1) that it is only employee action (or, in the case of a lockout, employer action), which falls within the scope of the definition. That is confirmed by the legislative history of the provision.

134    Before the introduction of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (“Work Choices Act”), s 4(1) of the WR Act provided a definition of “industrial action”. That definition did not have an equivalent to the current s 19(1)(d) which expressly deals with lockouts. It also differed from the current provision for constitutional reasons discussed in the Explanatory Memorandum to the Bill: see [135] below. Otherwise, the former s 4(1) definition is similar to the present definition, save in one relevant respect. The difference can be illustrated by looking at the paragraphs of s 4(1) of the WR Act which were replaced by s 19(1)(b) of the FW Act. Section 4(1) of the WR Act provided that “industrial action” included:

(b)    a ban, limitation or restriction on the performance of work, or on acceptance of or offering for work, in accordance with the terms and conditions prescribed by an award or an order of the Commission, by a certified agreement or AWA, by an award, determination or order made by another tribunal under a law of the Commonwealth or otherwise by or under a law of the Commonwealth;

(c)    a ban, limitation or restriction on the performance of work, or on acceptance of or offering for work, that is adopted in connection with an industrial dispute;

135    Notably, the phrase “by an employee” which appears twice in the current provision did not appear in the two predecessor provisions of s 19(1)(b) of the FW Act. The inclusion of that phrase, which also appears in s 19(1)(a), and the inclusion of the similar phrase - “by employees” - which now appears in s 19(1)(c), can be traced back to the changes made by the Work Choices Act to the definition of “industrial action” in the WR Act. The relevant Explanatory Memorandum to the Bill which became the Work Choices Act explained the change as follows:

1304.    Proposed section 106A would provide a definition of industrial action which would apply to the Act. The definition has been amended from that set out in pre-reform subsection 4(1) to reflect the changed constitutional basis on which the Act is to be based. As the Act (apart from Schedule 13) will no longer regulate industrial action on the basis of the conciliation and arbitration power set out in section 51(xxxv) of the Constitution, references to industrial action in connection with industrial disputes would be removed. Instead, industrial action would be defined by reference to certain types of action taken by an employer or an employee (as defined in proposed subsections 4AA(1) and 4AB(1)).

1305.    Paragraphs 106A(1)(a)-(c) would set out the types of conduct by an employee that constitute industrial action, including a failure to attend for work…

136    The Explanatory Memorandum to the Bill that became the FW Act (at paras 87-88) similarly explained that the definition of “industrial action” sets out “the types of conduct by an employee that constitute industrial action” and “defines industrial action by employers as locking out employees from their employment”.

137    It is also relevant to observe that, at the time the phrase “by an employee” was introduced into the definition of “industrial action”, there was a question upon which judicial authority differed as to whether the ban, limitation or restriction of work referred to in the definition of “industrial action” in s 4(1) of the WR Act was, or was not, confined to action imposed by employees upon their own work. That question, as Kenny J said at [34] of Cahill v Construction, Forestry, Mining and Energy Union (No 2) (2008) 170 FCR 357, was resolved by the inclusion of the phrase “by an employee” effected by the Work Choices Act.

138    In Cahill, Kenny J was called upon to determine whether the conduct of a union could constitute a ban within the meaning of paras (b) and (c) of the definition of “building industrial action” in s 36(1) of the Building and Construction Industry Improvement Act 2005 (Cth) (“the BCII Act”). As her Honour observed at [33], the terms of those paragraphs were equivalent to those formerly contained in paras (b) and (c) of s 4(1) of the WR Act before the introduction of “by an employee” into the definition of “industrial action”. It was for that reason that her Honour was called upon to consider (as she did at [37]-[49]), a number of authorities concerning the same provisions before the amendments made by the Work Choices Act.

139    It is not necessary for us to enter the debate in the earlier cases to which her Honour referred. Observations supportive of the proposition that the previous provisions were confined to the actions of employees in relation to their own work were made by Spender, Moore and Branson JJ in Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (1998) 89 FCR 200 at 213 (“CFMEU v AIRC”) and by Wilcox and Cooper JJ in Davids Distribution Pty Ltd v National Union of Workers (1999) 91 FCR 463 at [52]. Other authorities including Laing and NMHG Distribution Pty Ltd t/as Yale Asia Pacific v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 104 IR 158 (Full Bench of the then Australia Industrial Relations Commission) (“NMHG”) support or stand for the contrary proposition. Kenny J discussed these authorities and, for the purposes that confronted her in that proceeding, distinguished CFMEU v AIRC and Davids Distribution to conclude that action taken by a union can fall within the BCII Act’s definition of “building industrial action”. Her Honour’s view was followed by Jessup J in Williams v Construction, Forestry, Mining and Energy Union (2009) 179 IR 441; [2009] FCA 233 at [95].

140    However, as Kenny J observed at [58], for the purposes of the WR Act (and now the FW Act), with the change made to the definition of “industrial action” by the Work Choices Act, “it became clear in terms that a relevant ‘ban, limitation or restriction on the performance of work’ must be imposed ‘by an employee’”.

141    In Ambulance Victoria v United Voice [2014] FCA 1119 at [22] Tracey J said that “the addition of the words ‘by an employee’ in the extant definition confirms that ‘industrial action’ as defined in s 19(1)(b) of the FW Act is ‘so confined’”. We respectfully agree. The words “by an employee” in s 19(1)(b) confine the action covered by that paragraph to a ban, limitation or restriction imposed by employees on the performance of their work or their acceptance of or offering for work. The conduct of persons other than the employees whose work is banned, limited or restricted is not capable of constituting “industrial action” within the meaning of s 19(1)(b). It follows that the CFMEU could not have engaged in or (as the primary judge apparently found) “taken” industrial action.

142    Each of the cases BHP referred to or relied upon in respect of this point – Williams, NMHG and Liang – was concerned with a definition of industrial action which did not, in express terms, confine the scope of the definition to action taken “by an employee” and in which the Court or Tribunal did not regard the definition as so confined. Furthermore, in Davids Distribution Wilcox and Cooper JJ did not follow the observations of French J in Laing at 32 that a picket, the purpose of which was to prevent, deter or discourage employees from performing their work, was a communication capable of amounting to a “ban, limitation or restriction on the performance of work” and thus “industrial action”. At [52] their Honours held that “[a]ctivity that merely involves communication of information to persons entering or leaving a site is not ‘industrial action’ within the meaning of the definition in the Workplace Relations Act”. That position as Jessup J recently observed in Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 1373 at [45] remains authoritative.

143    That analysis leaves for determination the question whether the CFMEU “organised” industrial action when no industrial action occurred.

144    The word “organised” as Isaac J said in Pirrie v McFarlane (1925) 36 CLR 170 at 203 “is in itself of large connotation”. However, it is not the type or extent of the conduct falling within the scope of the word that we need here to consider but rather the sense in which it has been employed in s 417(1) of the FW Act.

145    The conduct prohibited by s 417(1) is the organisation or engagement in industrial action. But a contravention of s 417(1) only occurs if a person has organised industrial action by employees or employers or if employees or employers have engaged in such action. We do not consider that conduct which attempts, but fails, to organise the taking of industrial action is in contravention of s 417(1). There is a distinction to be drawn between organising industrial action and organising for industrial action. It is the organising of industrial action in which an employee or employer, as the case may be, has engaged, which s 417(1) prohibits. On BHP’s argument, an employer preparing for a lockout of its employees would contravene the section even if the preparations never came to fruition. So, too, an employer organisation would be in contravention of the FW Act where, despite a call upon its members to lock out employees, no lockout takes place. It is unlikely that Parliament intended that the section would have such a scope. There is no reason to conclude that a different approach was intended for employees and employee associations.

146    The mischief with which s 417(1) is concerned is that industrial action not occur in the period from which an enterprise agreement (or workplace determination) is approved (or comes into operation), until the time that the nominal expiry date of the instrument has passed. The evident intent is to ensure that that period is free of industrial action. The intent is reflected in the heading to Div 3 of Pt 3-3, the only provision of which is s 417. The heading reads “No industrial action before nominal expiry date of enterprise agreement etc.”

147    There can be no doubt that a contravention of s 417(1) by a person engaging in industrial action depends upon the industrial action occurring. In our view, that requirement applies consistently across each of the two means of contravention specified by s 417(1). Just as an attempt to engage in industrial action is not a contravention of s 417(1), an attempt to organise that action is also not within the scope of the provision.

148    We can discern no basis for thinking that Parliament intended to distinguish between employees on the one hand and a union and its officials on the other, by penalising the latter but not the former for conduct which threatened but failed to achieve the period of industrial peace which s 417(1) requires. The FW Act provides a particular mechanism for addressing proposed industrial action. Injunctive relief is available against a person who proposes to contravene s 417(1), whether by organising or by engaging in industrial action (ss 417(3)(b) and 545(1)).

149    We consider that the same analysis applies to a contravention of s 340 in relation to adverse action where an industrial association “organises or takes industrial action” within the meaning of s 342(1) Item 7 Column 2. We note in passing that s 342(2)(b) also provides that “adverse action” includes “organising” action covered by the table in s 342(1).

150    It follows that, in the absence of any evidence that after 1 July 2009 any employee took industrial action by refusing to work overtime as required, the CFMEU did not contravene s 417(1) by organising industrial action and did not contravene s 340(1) by organising or taking industrial action.

Was there error in the finding that the CFMEU had knowingly or recklessly made false or misleading representations (grounds 11–14)?

151    The case put by BHP as summarised by the primary judge (at [138]) was that “by promulgating the overtime policy”, the union parties made false or misleading representations that there were limitations on BHP’s workplace right under the 2007 Agreement to require employees at the mine to work unrostered overtime, that that right was limited by the overtime policy, and that the employees were obliged to take industrial action in the form prescribed by the policy.

152    The primary judge held (at [139]) that the overtime policy included false or misleading representations by the CFMEU “in terms of s 345 of the [FW] Act”, concerning BHP’s right to require its employees to work overtime because:

(a)    “person” in s 345 includes an industrial association;

(b)    the overtime policy stated that there were limitations on the amount of overtime employees at the mine could work, referable to the nature of the rosters of individual employees, and this was “plainly incorrect”;

(c)    the overtime policy might not purport to make a representation about the terms of cl 19.3, but it was “clearly inconsistent” with BHP’s entitlement under the clause to require employees to work reasonable overtime subject to prevailing operational requirements;

(d)    the representations concerning limitations on the amount of overtime an employee could work were made knowingly and/or recklessly in that:

(i)    the CFMEU was a party to the 2007 Agreement; and

(ii)    there was ample evidence in relation to the negotiations about cl 19.3 and there was no room for an interpretation of the clause which encompassed the limitation on unrostered overtime imposed by the overtime policy;

(e)    her Honour did not accept the submission of the union parties that there was no evidence that any of the union parties was the author of documents 1, 2 and 3;

(f)    In relation to Mr Leggett, as the overtime policy was in the information pack that Mr Leggett sent to new members of the union at the mine and as there is authority that, in promulgating a false and misleading statement, a person makes that statement (Universal Telecasters (Qld) Ltd v Guthrie (1978) 18 ALR 531 at 547), Mr Leggett made false and misleading statements.

153    The CFMEU contended that the primary judge should not have found that:

    In relation to s 345, there was a false or misleading representation about cl 19.3 of the 2007 Agreement when neither the overtime policy nor the documents purported to make any representation about cl 19.3;

    In relation to s 349, there was a false or misleading representation about another person’s obligation to take industrial action given that the documents said nothing about the obligation to institute the overtime policy;

    the CFMEU contravened ss 345 and 349 of the FW Act when there was no evidence or finding that Mr Leggett or anyone else acting on the CFMEU’s behalf had acted knowingly or recklessly in “promulgat[ing] the documents”.

154    BHP defended the findings on the following bases. While accepting that the overtime policy did not make any direct representation about the terms of cl 19.3, it submitted that the policy was inconsistent with the clause in that it prescribed overtime arrangements in a manner that limited BHP’s capacity to require employees to work overtime in accordance with the clause. BHP argued that the policy was false or misleading because it represented to employees that the position with respect to overtime at the mine was different to the true position, which was set out in the 2007 Agreement. BHP also submitted that the overtime policy made a false or misleading representation about an employee’s obligation to engage in industrial activity in that it represented that the employees were limited pursuant to the overtime policy in the amount of overtime they could work at the mine when no such limitation was contained in the 2007 Agreement. As the CFMEU (through Mr Leggett at least) was aware of the policy, and as the CFMEU, through its officials, was aware of cl 19.3, BHP argued, there could be no error in the finding that the representations were made knowingly and/or recklessly.

155    In our respectful opinion, the primary judge’s findings do disclose error.

156    First, as the CFMEU submitted, the fact that a representation may be inconsistent with a workplace right does not make it a representation about a workplace right. BHP did not point to any authority to suggest otherwise.

157    Secondly, none of the documents said anything about cl 19.3 or its effect. Consequently, they were not false as to the terms of cl 19.3 of the 2007 Agreement.

158    Nor were they misleading.

159    A representation is misleading if it has a tendency to lead a person into error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [39]. Of course, it is possible that a half-truth or an ambiguous remark or even silence may have this tendency (Justice JD Heydon AC, Thomson Reuters, Trade Practices Law – Competition and Consumer Law, vol 3 (at Service 178) [190.150]). But the words in the documents must be read in context. As Gibbs CJ said of misleading conduct contrary to s 52 of the Trade Practices Act 1974 (Cth), “[i]t is obvious that where the conduct complained of consists of words it would not be right to select some words only and to ignore others which provided the context which gave meaning to the particular words”: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199; see also Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193 at 241 (Gummow J).

160    Here, the heading to the offending statements made in the documents (“Overtime policy”) provided their context. So, too, did the statement: “This helps us to get more new employees like [yourself] a job”. No employee could reasonably conclude that the representations in any of the documents were anything more than representations about the union’s policy. There was no suggestion that the limitation referred to in the documents was imposed by the 2007 Agreement or had been agreed to by BHP. There is no evidence that the statements did lead anyone into a misconception about BHP’s right to require reasonable overtime in accordance with the 2007 Agreement. That circumstance, of course, is not at all decisive. But we are not persuaded that, read in context, the statements in the documents could lead anyone into an erroneous belief about what BHP was entitled to ask of its employees under the 2007 Agreement. They are unambiguously representations about the union’s overtime policy, not the employer’s workplace right.

161    Thirdly, although the CFMEU is a “person” within the meaning of the FW Act (see Acts Interpretation Act 1901 (Cth), s 2C), it is not a natural person. Thus, for the purpose of proving that the CFMEU made the representations knowing them to be false or recklessly indifferent as to their truth, it was necessary for BHP to prove that the person who made the representations was authorised by the union to make them. Prima facie, because the documents in which the statements appeared either carried the union logo (in the case of document 1) or were annexed to documents that carried the union logo (in the case of documents 2 and 3), they were so authorised. In the absence of any evidence to suggest otherwise, the primary judge was entitled to conclude that the statements were authorised by the CFMEU. But that was not enough to make out the allegation. As we have already observed, there was no evidence to show that it was more probable than not that the letter in the membership pack was sent after the FW Act came into effect. Consequently, the basis for the finding against Mr Leggett falls away. To the extent that the finding against the CFMEU might have been infected by this finding, it must also be set aside. Moreover, as BHP did not point to anyone else whose state of mind was relevant, even if, contrary to our view, the representations in the documents were false or misleading representations about BHP’s workplace rights under the 2007 Agreement, there is no evidentiary basis for the finding that the CFMEU made them knowing that they were false or misleading or recklessly indifferent as to their truth.

162    It follows that the findings of contraventions of ss 345 and 349 of the FW Act should be set aside.

Should a Jones v Dunkel inference have been drawn against the CFMEU based on its failure to call evidence (ground 5)?

163    In Jones v Dunkel (1959) 101 CLR 298 at 321 Windeyer J said that “[u]nless a party’s failure to give evidence be explained, it may lead rationally to an inference that his evidence would not help his case”. This is the inference to which this ground of appeal is directed. The CFMEU submitted that the primary judge erred in drawing such an inference against it to find that the overtime policy was the CFMEU’s policy.

164    The submission was based on what the primary judge said at [90] of her reasons:

In the absence of evidence tendered by the [union parties] from which the inference could be drawn that the policy was an unauthorised initiative of the Peak Downs Lodge, or that the Peak Downs Lodge was an entity separate from the CFMEU, the proper inference to draw is that the Lodge was acting as an organ of the CFMEU in respect of the overtime policy and that this policy was the CFMEU’s policy.

165    Earlier in her Honour’s reasons the primary judge extracted a lengthy passage from the reasons of Gilmour J in Fair Work Ombudsman v Offshore Marine Services Pty Ltd (No 2) [2013] FCA 943 under the heading “Relevant principles in respect of ‘no case to answer’ submission”. At [61] of her reasons her Honour said that she adopted Gilmour J’s views concerning the application of the principles of Jones v Dunkel “as necessary or appropriate in the circumstances”. In Offshore Marine Gilmour J followed Sackville J in Prentice v Cummins (No 5) (2002) 124 FCR 67 at [114] where his Honour said:

As a matter of principle, it is difficult to understand why, in such a case, once the respondents have made the election not to call evidence, the material to be taken into account should not include any inferences that may be available on the principle of Jones v Dunkel (1959) 101 CLR 298, by reason of their failure to call evidence. The respondents, by their election, have chosen to adduce no evidence in support of their case. The position is different from that which obtains where the respondents have reserved the right to call evidence if the no case submission is rejected. In such circumstances, it would be inappropriate to draw adverse inferences against the respondents for not doing something they have not yet been called on to do.

166    The CFMEU submitted that the primary judge was wrong to draw a Jones v Dunkel inference by relying on what Gilmour J had said about the Full Court’s decision in Rasomen Pty Ltd v Shell Company of Australia Ltd (1997) 75 FCR 216 (which his Honour suggested allowed inferences to be drawn against a party making a no case submission based on the absence of evidence from that party). It is unnecessary to consider whether Gilmour J was mistaken about the effect of Rasomen or whether a Jones v Dunkel inference was available. That is because, despite what her Honour said at [61], on a fair reading of the reasons she did not in fact draw a Jones v Dunkel inference. As BHP submitted, in effect, she drew inferences from the evidence that was given, not from the failure of the union parties to call evidence. The inferences were certainly available. The documents either carried the CFMEU’s logo or were annexed to documents that did. The CFMEU is a business within the meaning of the Evidence Act (Dictionary, Pt 2, s 1). It may reasonably be supposed that the logo was placed on the documents in the course of that business. Consequently, the Court was entitled to use that information to find that the documents originated from the CFMEU: Evidence Act, s 70. As her Honour noted (at [89]), the union parties admitted in their defence that the CFMEU conducts its business, amongst other things, through lodges at each mine including the Peak Downs mine. It was not in dispute that the CFMEU’s overtime policy limited overtime to 13 hours a week. The union parties admitted that the words in document 1 reflected the views of the members of the union as reflected in resolutions carried at the National Convention of the CFMEU Mining and Energy Division in May 1997 and the Queensland District Board of management meeting in November 1997, and that the Lodge had endorsed the district policy. The reference to “the absence of evidence” in the opening words of [90] of her Honour’s reasons is merely an observation that there was no evidence to contradict the inferences arising from the evidence.

167    Ground 5 should be dismissed.

Was it necessary for BHP to adduce evidence that the overtime policy was inconsistent with the 2007 Agreement?

168    The CFMEU claimed that the primary judge erred in finding that there was industrial action without having regard to the specific limits in cl 19.3 of the agreement and whether there was evidence to support the breaching of those limits.

169    The limits in the clause were as to reasonableness, “prevailing arrangements” and “prevailing operational requirements”.

170    There can be no doubt that the provision in cl 19.3 relating to unrostered overtime was subject to the opening words of the clause: “... employees may be required to work reasonable overtime” (emphasis added). If it were not read in that way it would be unenforceable.

171    Part 2-2 of the FW Act contains the National Employment Standards. An enterprise agreement must not exclude any provision of the National Employment Standards (s 55(1)). To the extent that it does, a term of an enterprise agreement has no effect (s 56). One of those standards relates to maximum weekly hours of work. It appears in s 62. Section 62 provides:

Maximum weekly hours of work

(1)    An employer must not request or require an employee to work more than the following number of hours in a week unless the additional hours are reasonable:

(a)    for a full-time employee – 38 hours: or

(b)    for an employee who is not a full-time employee – the lesser of:

(i)    38 hours: and

(ii)    the employee’s ordinary hours of work in a week.

Employee may refuse to work unreasonable additional hours

(2)    The employee may refuse to work additional hours (beyond those referred to in paragraph (l)(a) or (b)) if they are unreasonable.

Determining whether additional hours are reasonable

(3)    In determining whether additional hours are reasonable or unreasonable for the purposes of subsections (1) and (2), the following must be taken into account:

(a)    any risk to employee health and safety from working the additional hours;

(b)    the employee’s personal circumstances, including family responsibilities;

(c)    the needs of the workplace or enterprise in which the employee is employed;

(d)    whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours;

(e)    any notice given by the employer of any request or requirement to work the additional hours;

(f)    any notice given by the employee of his or her intention to refuse to work the additional hours;

(g)    the usual patterns of work in the industry, or the part of an industry, in which the employee works;

(h)    the nature of the employee’s role, and the employee’s level of responsibility;

(i)     whether the additional hours are in accordance with averaging terms included under section 63 in a modern award or enterprise agreement that applies to the employee, or with an averaging arrangement agreed to by the employer and employee under section 64;

(j)    any other relevant matter.

172    It follows that BHP’s employees could only be required to work unrostered overtime if it was reasonable in the circumstances to require the additional hours to be worked. But this does not mean that BHP could only prove that there was a ban, limitation or restriction in place if they called evidence of what constituted reasonable overtime or evidence that since 1 July 2009 employees had been required to work reasonable unrostered overtime in excess of the limits in the policy and had refused to do so.

173    What is “reasonable” is necessarily assessed on a case-by-case basis, by reference to the employee’s circumstances and the employer’s business in accordance with the terms of s 62(3) of the Act: cf. Metal Trades Employers Association v Boilermakers Society of Australia (1960) 4 FLR 333 at 334 (Dunphy J, with whom Morgan J agreed). As BHP submitted, the overtime policy imposed a “blanket proscription”. The limit of 56 hours of work for employees on a 5-day roster, and of one overtime shift every 16 days for employees on a 7-day roster, was entirely arbitrary. Under the policy, the limit on overtime was to apply in all cases, regardless of whether it might have been reasonable to require the working of overtime in the particular circumstances. Because of its arbitrary nature, the policy was inconsistent with cl 19.3 of the agreement. To establish inconsistency, it was not necessary for BHP to adduce evidence to show that any request of an employee to work overtime was unreasonable.

174    It follows that grounds 6 and 7 of the notice of appeal should be dismissed. We would uphold ground 8 to the extent that it challenged the primary judge’s finding that the CFMEU organised or engaged in industrial action in the absence of evidence that any employee had taken industrial action after 1 July 2009.

Was the finding that BHP had a workplace right within the meaning of the FW Act wrong (ground 9)?

175    The primary judge deals with this issue at [122] to [124].

122    First, an entitlement of an employer to require work to be done is clearly a workplace right vesting in that employer: Laing O'Rourke Australia Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] FCA 133. I accept the submission of the applicant that the terms of cl 19.3 plainly entitle the employer to require employees to work unrostered overtime in prescribed circumstances. This confers a right, of clear benefit, on the applicant within the meaning of s 341(1)(a) of the Fair Work Act.

123    Second, that this workplace right of the applicant is limited by the terms of cl 19.3 does not preclude the entitlement conferred by cl 19.3 from being a workplace right.

124    Third, the [union parties] claim that cl 19.3 confers rights on the employees. That a workplace agreement gives rights to both employer and employees is scarcely a novel concept (cf for example comments of Lee J in Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370). In my view that cl 19.3 may also confer rights on employees does not detract from the workplace right conferred on the applicant by cl 19.3.

(Original emphasis.)

176    It will be remembered that a person has a workplace right within the meaning of s 341 of the FW Act if, amongst other things, the person is entitled to the benefit of a workplace law or instrument – here, the 2007 agreement. Section 341 does not speak of benefits conferred by or under a workplace instrument. However, the Explanatory Memorandum to the Fair Work Bill states (at para 1362) that the phrase “entitled to the benefit of” is intended to capture both the fact that the workplace law or instrument applies to a person as well as the individual entitlements under the law or instrument. See, too, Greater Dandenong City Council v Australian Municipal, Administrative, Clerical and Services Union (2001) 112 FCR 232. Neither party suggested that the section should be read any other way.

177    Nonetheless, the CFMEU submitted that the primary judge was wrong to find that BHP had a workplace right to require reasonable unrostered overtime because cl 19.3 did not confer a benefit on BHP; rather, it imposed a detriment in that it limited the amount of overtime BHP could require of its employees. But for the limitations in cl 19.3, the CFMEU contended, BHP would have been entitled to require employees to work unlimited overtime, subject only to safety considerations. The CFMEU referred to a passage in Australian Industry Group v Fair Work Australia (2012) 205 FCR 339 (“AIG v Fair Work”) at [62] in which the Full Court queried whether an employer has a “workplace right” within the meaning of the Act. The CFMEU also pointed out that in the Explanatory Memorandum there is no mention of employers having workplace rights.

178    The CFMEU’s argument should be rejected.

179    The observation in AIG v Fair Work was only an aside. There is nothing in either the text of the FW Act or, for that matter, the extrinsic material to warrant reading down the plain words of s 341(1)(a) so as to exclude employers. It is true, as the CFMEU submitted, that cl 19.3 limited BHP’s capacity to demand that its employees work unrostered overtime by what was reasonable. But an employer has no right at common law to demand unlimited overtime, qualified only by safety considerations, and s 62 of the FW Act certainly precludes an employer from demanding unreasonable overtime. A provision which states that “[i]n accordance with prevailing arrangements, employees may be required to work reasonable overtime”, including unrostered overtime, in addition to rostered overtime, entitles the employer to a benefit. There is no doubt that BHP is entitled to the benefit of cl 19.3 of the 2007 Agreement.

180    We would dismiss ground 9.

Did the primary judge err in finding that the overtime policy was promulgated because of BHP’s workplace right to require reasonable unrostered overtime (ground 10)?

181    In paras 23 and 24 of the statement of claim BHP alleged that the CFMEU took adverse action (in that it threatened to take or organise industrial action against it “by seeking to impose an overtime ban as prescribed in the Document”, or it took or organised industrial action “by imposing an overtime ban as prescribed in the Document”) in order to prevent BHP from exercising its workplace right to require its employees to work unrostered overtime under the 2007 Agreement.

182    The FW Act provides that a person takes action for a particular reason if the reasons include that reason (s 360). If it is alleged in an application in relation to a contravention of Pt 3-1 of the Act (which includes the relevant alleged contravention) that a person took action for a particular reason and taking that action for that reason would constitute such a contravention, then it is presumed that the action was taken for that reason unless the person proves otherwise (s 361).

183    Here, then, it is presumed that the action was taken for a reason that included BHP’s right to require its employees to work unrostered overtime in accordance with the agreement unless the CFMEU proved otherwise.

184    In her reasons for judgment the primary judge noted an observation by French CJ and Crennan J in Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 (“Barclay”) at [45] that “direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden [of proof]”. She found that the CFMEU had not discharged that burden in the present case.

185    At [127] her Honour said:

In this case no evidence was given by the [union parties] as to the reason(s) for the development or promulgation of the overtime policy. The evidence before the Court demonstrates that the terms of cl 19.3 and the right of the applicant to require unrostered overtime as contemplated by that clause were the subject of negotiations between the applicant and the first respondent in the period prior to the settlement of the 2007 Agreement, and that no objections were raised by the first respondent to the provisions of cl 19.3. Even if – as the first respondent submits – the overtime policy was developed prior to the 2007 Agreement, the first respondent clearly maintained the policy in the face of that Agreement. The effect of the policy is to plainly limit employees working unrostered overtime, even if that overtime were reasonable and required to meet operational requirements, and to deprive the applicant of its entitlement to have employees work unrostered overtime unless the overtime was worked in circumstances contemplated by the overtime policy.

186    The CFMEU submitted that her Honour erred:

(a)    by failing to identify a decision-maker;

(b)    because the High Court in Barclay did not suggest that direct testimony was a necessary precondition to displacing the statutory presumption; and

(c)    because none of the evidence referring to the overtime policy mentioned cl 19.3 or any of BHP’s alleged rights under it.

187    It is unnecessary for an applicant to identify the decision-maker and unnecessary for the Court to do so where the s 361 presumption has not been rebutted. The purpose of s 361 is to shift the onus to the alleged wrongdoer, in part because in many cases an applicant will not know the identity of the decision-maker or, more importantly, what actuated the decision-maker. The first error asserted by the CFMEU is not made out.

188    Turning to the second alleged error, we accept the CFMEU’s submission that the judgment of the High Court in Barclay did not suggest that direct testimony from the respondent was a necessary precondition for discharging the statutory presumption imposed by s 361. We do not accept, however, that the primary judge considered that it was. Her Honour’s observation about the CFMEU’s failure to call evidence as to the reason or reasons for the development or promulgation of the policy is not to be read in this way. She was, however, entitled to take that matter into account and to give it substantial weight.

189    In General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 at 617, dealing with the equivalent provision in the Conciliation and Arbitration Act 1904-1976 (Cth) (s 5(4)), Mason J said:

Section 5(4) imposed the onus on the appellant of establishing affirmatively that it was not actuated by the reason alleged in the charge. The consequence was that the respondent, in order to succeed, was not bound to adduce evidence that the appellant was actuated by that reason, a matter peculiarly within the knowledge of the appellant. The respondent was entitled to succeed if the evidence was consistent with the hypothesis that the appellant was so actuated and that hypothesis was not displaced by the appellant. To hold that, despite the subsection, there is some requirement that the prosecutor brings evidence of this fact is to make an implication which, in my view, is unwarranted and which is at variance with the plain purpose of the provision in throwing on to the defendant the onus of proving that which lies peculiarly within his own knowledge.

190    Section 5(4) was differently worded from the wording now found in s 361 of the FW Act. Nevertheless, the passage from the judgment of Mason J remains authoritative. In Barclay at [86] Gummow and Hayne JJ treated it as bearing upon the onus borne by a respondent under the FW Act. At [105] their Honours said that with respect to the onus of proof, the FW Act “adopts the same position as that under the 1904 Act”: see further Gummow and Hayne JJ at [104] and French CJ and Crennan J at [59].

191    The first point made by Mason J in the quoted passage is that the onus is on a respondent to “establish affirmatively that it was not actuated by the reason alleged”. As Gray J said in National Tertiary Education Union v Royal Melbourne Institute of Technology (2013) 234 IR 139 at [20], to establish the fact that an alleged reason was not a reason actuating the conduct of the respondent requires the establishment of a negative proposition. In other words, the evidence must negate the alleged reason as a reason for the impugned conduct.

192    It is possible that the alleged reason may be negated by a respondent on the applicant’s own evidence. Where the connection between the reason alleged and the impugned conduct is so remote as to be fanciful, the onus may well be discharged in the absence of any evidence from the decision-maker. But as French CJ and Crennan J observed at [45] of Barclay, “[g]enerally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker”.

193    Here, on the primary judge’s findings at [127]:

(i)    the CFMEU knew of BHP’s right under the 2007 Agreement to require reasonable overtime to be worked;

(ii)    the policy was inconsistent with the 2007 Agreement; and

(iii)    the policy was maintained in the face of the 2007 Agreement.

194    In those circumstances and despite the fact that the evidence referring to the overtime policy did not mention cl 19.3 or any of BHP’s alleged rights under it, the connection between the alleged reason and the impugned conduct was not fanciful. For that connection to be negated, the CFMEU needed to call evidence. It did not and the primary judge was entitled to hold that the CFMEU had failed to discharge its onus.

195    Accordingly, we would reject ground 10.

Conclusion

196    In summary, the primary judge erred in failing to determine when the conduct the subject of the allegations had taken place and in particular that the conduct occurred after the FW Act came into force. As some or all of the conduct relied upon either did or could have occurred before the FW Act came into force, the errors were material and significant and they affected the findings in relation to all the alleged contraventions. In addition, there are errors which affected the primary judge’s findings that the CFMEU took or organised industrial action and that the CFMEU and Mr Leggett made false and misleading representations. It follows that the findings made that the CFMEU contravened the FW Act cannot stand.

197    Having regard to the conclusions we have reached, it is neither necessary nor appropriate to deal with the appeal against the penalty judgment. The appeal should be allowed and the orders made in both judgments set aside.

Costs

198    Section 570 of the FW Act limits the circumstances in which the Court can make an order for costs. In the event that the CFMEU is disposed to apply for costs, its application should be filed within 14 days, accompanied by affidavit evidence, if necessary, and submissions of no more than four pages. BHP should have 14 days to respond by affidavit evidence if necessary and by submissions of that same maximum length. Unless the Court otherwise directs, the application will then be dealt with on the papers.

Associate:    

Dated:    6 March 2015