FEDERAL COURT OF AUSTRALIA
Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2000] FCA 1188
INDUSTRIAL LAW – certified agreements - actions taken by union organiser to coerce employer to enter into certified agreement contrary to s 170NC of the Workplace Relations Act 1996 (Cth) - whether sufficient to show that intention to coerce is one of several reasons for action - whether sufficient to show that intention to coerce contrary to s 170NC is a substantial or operative reason - whether common law liability of union for organiser’s breach excluded by terms of the Act - whether union liable vicariously or by operation of s 349
Workplace Relations Act 1996 (Cth)
Conciliation and Arbitration Act 1904 (Cth)
Crimes Act 1914 (Cth) s 5
Income Tax Assessment Act 1936 (Cth) s 230
Trade Practices Act 1974 (Cth) s 84
Industrial Relations Act 1979 (WA) ss 96E and 96G(2)
Tesco Ltd v Nattrass [1972] AC 153
Minister for Immigration, Local Government and Ethnic Affairs v Hamsher (1992) 35 FCR 359
General Motors Holden Pty Ltd v Bowling (1976) 51 ALJR 235
Hamilton v Whitehead (1988) 166 CLR 121
Mallan v Lee (1949) 80 CLR 198
Rowe v Transport Workers Union of Australia [1998] FCA 1646,(1998) 160 ALR 66
Trade Practices Commission v Queensland Aggregates Pty Ltd (1982) 44 ALR 391
Trade Practices Commission v Tubemakers of Australia Ltd (1983) 47 ALR 719
Ducasse v Transport Workers Union of Australia (1995) 65 IR 1
Mousell Brothers Ltd v London and North-Western Railway Co [1917] 2 KB 836
King v Australasian Films Ltd (1921) 29 CLR 195
Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477
Evenco Pty Ltd v Amalgamated Society of Carpenters, Joiners, Bricklayers and Plasterers of Australasia Union of Employees, Queensland [1999] QSC 53
Evenco Pty Ltd v Amalgamated Society of Carpenters, Joiners, Bricklayers and Plasterers of Australasia Union of Employees, Queensland [2000] QCA 108
GTS Freight Management Pty Ltd v Transport Workers Union of Australia (1990) 25 FCR 296
Australian Industry Group v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2000] FCA 629 (unreported, FCA, 12 May 2000)
Kelly v Construction Forestry Mining and Energy Union (1994) 129 ALR 109
Walplan Pty Ltd v Wallace (1985) 8 FCR 27
J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers – Western Australian Branch (1992) 111 ALR 502
Employment Advocate v National Union of Workers [2000] FCA 710
Macken et al The Law of Employment 4th ed., 1997 at pp.356 and 360
JEFFREY GORDON HANLEY v AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION and FINBARR DOWLING
V 550 of 1999
RYAN, MOORE and GOLDBERG JJ
24 AUGUST 2000
MELBOURNE
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IN THE FEDERAL COURT OF AUSTRALIA |
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V 550 of 1999 |
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
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BETWEEN: |
JEFFREY GORDON HANLEY Appellant
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AND: |
AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION First Respondent
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FINBARR DOWLING Second Respondent
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DATE OF ORDER: |
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WHERE MADE: |
THE COURT ORDERS THAT:
1. The appeal be allowed.
2. The order of the Magistrates Court of 9 September 1999 be set aside.
3. It be declared that each of the first and second respondents has contravened s 170NC of the Workplace Relations Act 1996 (Cth).
4. The matter be remitted to the Magistrates Court for consideration of any penalty to be imposed in respect of the contraventions declared in paragraph 3 of this Order.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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IN THE FEDERAL COURT OF AUSTRALIA |
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V 550 of 1999 |
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
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BETWEEN: |
Appellant
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AND: |
AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION First Respondent
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Second Respondent
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JUDGES: |
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DATE: |
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PLACE: |
REASONS FOR JUDGMENT
THE COURT
1 This is an appeal against an order of the Magistrates Court of Victoria of 9 September 1999 dismissing a complaint made by Mr Jeffrey Hanley (“the appellant”) alleging that the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (“the Union”) and Mr Finbarr Dowling had breached s 170NC of the Workplace Relations Act 1996 (Cth) (“the Act”).
2 The breaches of the Act were said to have occurred in October 1998 when Dowling was present on a building site where on-site metal fabrication work was being undertaken by Mr Tony Pondeljak who traded as Dellicks Site Welding. Section 170NC(1) provides:
“(1) A person must not:
(a) take or threaten to take any industrial action or other action; or
(b) refrain or threaten to refrain from taking any action;
with intent to coerce another person to agree, or not to agree, to:
(c) making, varying or terminating, or extending the nominal expiry date of, an agreement under Division 2 or 3; or
(d) approving any of the things mentioned in paragraph (c).
(2) ...……”
3 It can be seen that this subsection is intended to prohibit certain types of threatening conduct. The reference in par (c) to “an agreement under Division 2 or 3” includes an agreement made under s 170LJ of the Act between any employer and an organisation of employees. It was common ground that references made by Dowling to an “EBA” in conversations with Pondeljak can be taken to be references to an agreement made under that section. The same expression will be used in this judgment.
4 The gravamen of the complaint was that Dowling threatened Pondeljak in a variety of ways with a view to having him sign an EBA to cover employees of his business. In the hearing before the magistrate conducted on 12 August 1999, evidence was given by the appellant and Pondeljak. The appellant sought to prove what had been said by Dowling by tendering a tape recording of conversations between Pondeljak and Dowling. A transcript of the tape recorded conversations was also tendered.
5 The proceedings before the magistrate had been commenced by the filing of a complaint in accordance with rule 4.02 of the Civil Procedure Rules of the Magistrates Court of Victoria. The complaint included particulars of the claim. Paragraph 3 of the particulars read :
“3. The Second Defendant (hereinafter “Mr Dowling”) is and was at all material times:
(a) an organiser employed by the Union; and
(b) authorised to act on behalf of the Union in respect of industrial and employment disputes concerning the Union and its members.”
6 Much of the remainder of the particulars set out, as a pleaded case, the circumstances which will be referred to later in this judgment, namely the conduct of Dowling on 27 and 28 October 1998. The penultimate paragraph of the particulars read:
“31. By reason of the matters set out in paragraphs 11 to 24 both the Union and Mr Dowling have breached section 170NC (1) of the Act.”
The particulars do not expressly identify or plead the basis upon which the Union was alleged to have contravened s 170NC because of the conduct of Dowling. However, before the complaint was filed on 2 December 1998, a letter had been written to the National Secretary of the Union (dated 16 November 1998) drawing attention to s 349 of the Act in relation to Dowling’s actions. That section provides:
“(1) Where it is necessary to establish, for the purposes of the Act, the state of mind of a body corporate in relation to particular conduct, it is sufficient to show:
(a) that the conduct was engaged in by an officer, director, employee or agent of the body corporate within the scope of his or her actual or apparent authority;
(b) that the officer, director employee or agent had the state of mind.
(2) Any conduct engaged in on behalf of a body corporate by:
(a) an officer, a director, employee or agent of the body corporate within the scope of his or her actual or apparent authority; or
(b) any other person at the direction or with the consent or agreement (whether express or implied) of an officer, director, employee or agent of the body corporate, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the officer, director, employee or agent;
shall be taken, for the purposes of this Act, to have been engaged in also by the body corporate.
(3) A reference in this section to the state of mind of a person includes a reference to the knowledge, intent, opinion, belief or purpose of the person and a person's reasons for the intent, opinion, belief or purpose.”
7 For reasons which we shall explain shortly, there is an issue whether there should have been a reference in the particulars to s 349 or to the vicarious liability of the Union and, if so, should the appellant have been permitted by the magistrate to amend the complaint or should the appellant be permitted to amend the complaint in this appeal.
8 The reasons for decision of the magistrate published on 9 September 1999 traversed several issues. After briefly summarising the nature of the proceedings and the circumstances giving rise to them, his Worship dealt with the question of whether the complaint disclosed a cause of action against the Union. After indicating that s 170NC(1) was to be viewed as a penal provision, his Worship rejected the suggestion that the Union might be vicariously liable for the conduct of Dowling (referring to Tesco Ltd v Nattrass [1972] AC 153 at 199) and indicated that the only basis on which the Union might be liable for Dowling's conduct was by operation of s 349. His Worship noted that this section had not been pleaded. His Worship then indicated that he would refuse the application to amend the pleadings to refer to this section and indicated that he would dismiss the action against the Union as the pleadings did not disclose a cause of action against it.
9 His Worship then dealt with an argument that the material disclosed fourteen offences rather than one and indicated that he would approach the matter on the basis that there could only be two offences arising out of conduct on the two days on which Dowling had spoken to Pondeljak and the conversations recorded on those days. His Worship then accepted a submission that the degree of satisfaction necessary for him to be satisfied, on the civil standard, whether particular facts had been proved would be influenced by the gravity of the allegations made.
10 The magistrate’s reasons then discussed submissions about whether s 170NC concerned only conduct where the sole purpose of the defendant was to coerce a person, amongst other things, to sign an EBA or was also concerned with conduct where achieving that objective was a substantial and operative factor actuating the conduct. He concluded that the section applied to both forms of conduct.
11 These rulings provided the framework in which the evidence was considered. After setting out or summarising the more significant parts of the conversations between Dowling and Pondeljak, his Worship said:
“In my opinion it is reasonable to conclude that the gravamen of Mr Dowling's threats over the two conversations relates to the consequences of a person acting contrary to Union policy and requirements, rather than to coerce the entry into an EBA. The fact that the securing of an EBA was Mr Dowling's general objective cannot be said to be conclusive that it was the intention underlying his threats.
To "coerce" means simply to force or compel a person to (do) something. What that something is, is clearly set out in the section. The burden on the plaintiff in these proceedings is to satisfy the Court to the required rigorous standard, that the threats were uttered by Mr Dowling with the specific intention of forcing Mr Pondeljak into entering into an EBA. That is that coercion in the entry of an agreement was a substantial and operative factor in the making of the threats.
Having listened carefully to the conversations and read carefully and considered the transcript in order to put the impugned conduct fully in the context, I cannot be satisfied that the plaintiff has discharged that burden. The complaint will therefore be dismissed.”
12 Before dealing with a number of the issues arising in this appeal and, in particular, considering whether this conclusion of the magistrate was erroneous, it is convenient to examine at the outset, the role of the Court in an appeal such as this. The primary facts were not in issue before the magistrate in the sense that the words spoken by Dowling and the tone and context in which they were spoken were established, at least in large measure, by the tender of the tape recording of the conversations and the transcript. Of critical importance in the proceedings were the inferences to be drawn from those primary facts about Dowling's intentions and the reason, or reasons, why Dowling had made various statements which were, on their face, threats directed to Pondeljak.
13 In an appeal such as this the principles are clear. First, the appellate court is in as good a position as the magistrate to decide what inferences might properly be drawn from facts which are undisputed. Nonetheless, in deciding what inferences should be drawn the appellate court will give respect and weight to the conclusion of the magistrate. It is incumbent on an appellant to demonstrate an error in this instance by showing, for example, a failure to draw inferences that should have been drawn from the established facts. But as Beaumont and Lee JJ said in Minister for Immigration, Local Government and Ethnic Affairs v Hamsher (1992) 35 FCR 359 at 368-369:
“The Court is unlikely to be so satisfied (that the trial Judge failed to draw inferences) if all that is shown is that the trial judge made a choice between competing inferences, being a choice the Court may not have been inclined to make but not a choice the trial judge should not have made.”
14 The appellant suggested some significance attaches to the fact that this is an appeal from a magistrate and not a judge. However that is an immaterial consideration in the sense that the magistrate was the judicial officer on whom jurisdiction was conferred to hear and determine the complaint, and his Worship’s conclusions concerning the evidence and available inferences should be given the respect to which we have just referred.
15 We mentioned in pars 6 and 7 that an issue arose before the magistrate whether the appellant had to amend the particulars of claim to raise s 349 or an allegation of vicarious liability and, if so, should the amendment be permitted. His Worship decided an amendment was necessary but refused to allow it. In our view the bases on which the allegations were made against the Union were sufficiently identified in the particulars of claim and did not have to be particularised further. The allegations in the particulars of claim, that Dowling was an organiser employed by the Union and was authorised to act on its behalf in respect of industrial and employment disputes concerning the Union and its members, raised sufficiently a factual basis for the application of s 349 and an allegation of vicarious liability. The relevance of these allegations was recognised in the respondent’s defence which admitted these allegations save for the caveat that Dowling’s authorisation extended only to lawful conduct. It followed from these allegations and the particulars as a whole that the appellant’s case was that Dowling’s conduct was to be taken as engaged in also by the Union. It was not necessary to plead the provisions of s 349 or refer to the term “vicarious liability”. If there was any doubt, the letter of 16 November 1998 put the respondents on notice of the relevance of s 349 in relation to Dowling’s actions. We are satisfied that the particulars of claim disclosed a cause of action against the Union and that the magistrate should not have dismissed the action against the Union on the basis that no cause of action was disclosed in the particulars of claim.
16 It is convenient now to consider the primary facts emerging principally from the tape recording and transcript. The events central to these proceedings occurred on Tuesday 27 and Wednesday 28 October 1998 at a site where the Northcote Shopping Centre was under construction. However, Pondeljak gave evidence before the magistrate of a conversation with Dowling on Thursday 22 October 1988 which, the appellant submitted, constituted part of the relevant background.
17 Pondeljak said he had a discussion with Dowling on site on that day. The following emerges from the examination in chief and cross examination of Pondeljak.
18 Pondeljak first met Dowling on 22 October 1998. Mr Peter Smith, a representative of the head contractor, called him down from the roof where he had been working. Mr Smith was accompanied by Dowling. While the evidence is not entirely clear, it is probable that Dowling and Pondeljak first talked about the capacity in which Pondeljak was working. Dowling asked for whom he was working and Pondeljak replied it was A J De Muri (A.J.De Muri Constructions Pty Ltd). Dowling then said "so you’re PPSing", meaning working as a sub-contractor. This led Dowling to say that he had a problem with Pondeljak working on site because he was a boss.
19 Dowling then asked Pondeljak whether he had an EBA. When Pondeljak said he did not, Dowling said he could not work on site without an EBA. It appears that Dowling told Pondeljak to pack up because he was "PPSing" and because he did not have an EBA. In the result, Pondeljak did pack up and left the site at 1.30 pm. During his conversation with Dowling, Pondeljak was told to go to the Union office to sign an EBA the following day and was also told his employees could resume work on the Friday (23 October 1998) while he went to the Union office to sign the agreement. In this conversation, Pondeljak was given the name of a woman at the Union office to call about signing an EBA.
20 On the following day, Friday, Pondeljak rang the Union office and left a message for Dowling who later rang Pondeljak. Pondeljak told Dowling he had been tied up and could not get into the office on that day and he made an arrangement with Dowling to go into the office on the following Monday. In cross-examination Pondeljak agreed, in effect, that it would have been reasonable for Dowling to have then assumed there were no problems about Pondeljak signing an EBA. Pondeljak did not go to the Union’s office on Monday and did not ring to explain why he was not going there.
21 On Tuesday 27 October 1998 Dowling met Pondeljak at the building site. The first words spoken were by Dowling who asked where was the EBA. Pondeljak said he had not had time to sign one which led Dowling to say that Pondeljak could not work on site. Pondeljak responded by asking why he could not work on site if he signed an EBA. Dowling’s initial response was to say that Pondeljak could work on site when he signed it but he quickly changed his mind and indicated that Pondeljak could not work on site because he was “a boss”.
22 There was then a series of exchanges in which Dowling insisted that Pondeljak could not, himself, work on site and, Pondeljak, for his part, contended that he had to be able to do so. Also present during some of this conversation was Mr Roberts, a site foreman employed by Construction Engineering. The signing of the EBA and whether Pondeljak could, himself, work “on the tools” were recurring themes permeating much of the conversation between Dowling, Roberts and Pondeljak.
23 The first passage in the conversation relied on by the appellant as establishing a contravention of s 170NC contained Dowling’s acceptance of a proposition by Pondeljak that what Dowling was saying was that he would blacklist Pondeljak. However, this part of the conversation, in context, concerned the blacklisting of Pondeljak if he continued to assert a right to work on the tools. This is to be contrasted with the second passage relied upon by the appellant which was fairly clearly directed to the signing of the EBA. The following was said:
“MR DOWLING: Cut the bullshit. I'm not wasting any more time. These people don't work on Saturdays because they don't have a construction EBA. As simple as that.”
24 The reference to “these people” and “they” was a collective reference to Pondeljak and his employees. There is nothing in the preceding or following conversation which might explain why the declaration about future work was confined to work on Saturdays.
25 Following this statement by Dowling there was a brief discussion, involving Roberts, concerning the need to have an EBA. In the course of that discussion Roberts said that at least one EBA (probably, by implication, an EBA applying at that site) contained a provision which would prevent a "boss" working on the tools. After this discussion, Pondeljak indicated that he did not have a problem signing an EBA applying to his employees but did indicate that it was necessary for the survival of his business for him to work on the tools. Pondeljak then indicated he felt he was being pressured into signing something.
26 There then followed a further discussion about Pondeljak working on the tools in which Roberts endeavoured to explain to Pondeljak the acceptable limits (that is, acceptable to Dowling) within which Pondeljak could work on site. There was then a discussion about the way in which Dowling might inspect Pondeljak's books.
27 Pondeljak next had a telephone conversation with Mr Tony De Muri. Pondeljak then complained to Roberts about not being able to work on the tools and about being threatened with being blacklisted. The conversation then turned to the events of the preceding few days and Pondeljak’s failure to sign an EBA. Roberts proposed that Dowling and Pondeljak make an arrangement to discuss the EBA and for Pondeljak to sign it. Pondeljak indicated that one of the matters he wished to discuss was whether he would be able to work. It is, in context, reasonably clear that Pondeljak was referring to his being able himself to work “on the tools”. It is also reasonably clear that Dowling maintained his position that Pondeljak could not work on the tools. As well, there was discussion about Dowling procuring work for Pondeljak and Tony De Muri’s position in the conflict between Dowling and Pondeljak.
28 Pondeljak then expressed his understanding that his employees were not allowed to continue to work at the site which led to the following exchange (which the appellant contends is a further breach of s 170NC):
“MR PONDELJAK: No, I'm asking right now. I'm asking Finbarr Dowling, can my boys come out and work here tomorrow? Can they work here?
MR DOWLING: You haven't got a construction EBA.
MR PONDELJAK: Are they allowed to come and work?
MR DOWLING: If you haven't got a construction EBA, no.”
29 There was then a discussion between Roberts and Pondeljak about what Pondeljak might do and Roberts made the suggestion that Pondeljak might come to the site on the following day to look at the EBA. This led to the following response by Dowling (which is alleged by the appellant to be another instance of a breach of s 170NC):
“MR DOWLING: No, I've given him enough time. He, he’s fucked me around, he told me he'd be in yesterday. He either goes in there and fixes up the EBA or he won't be working. He is no different to anyone else, I can give your list there of over 50 companies that have signed construction EBAs, and they are obliging [sic] to the EBAs, haven't got a problem. So he should be no different to anyone else. This mob got here, DBL, what is their boss [sic] do? ”
30 Shortly after Dowling expressed the opinion that Pondeljak did not want to sign the construction EBA, Pondeljak indicated that he was not saying that. He indicated he was talking about his being able to work on the tools and that this was a matter he wanted to clear up. There was then a discussion in which Pondeljak indicated he would be working himself tomorrow and Dowling replied by saying that they would stop him, would come to the site with a representative of the ETU and they would then "put everyone in the sheds" and, a little later, that "I'll stop the whole job". While this is relied upon by the appellant as evidencing two further breaches of s 170NC, the threat apparently to stop all work on the site related to Pondeljak's expressed intention to work on the tools on the following day.
31 There was then a discussion between Dowling and Pondeljak about whether Pondeljak was paying his employees the appropriate rate of pay. Roberts then became involved and indicated that Pondeljak would have to have an EBA. Dowling then made a phone call in which he spoke of people who did not have EBAs, plainly a reference to Pondeljak. In the conversation which followed, Dowling made two further references to stopping the job though it is not entirely clear whether this was because Pondeljak had not signed an EBA, or because he proposed to work on the tools or both. Pondeljak then spoke on the phone to a representative of the head contractor and explained that his employees were not being allowed to work because of the problem concerning him working. During the call Dowling interjected and invited Pondeljak to tell the representative that he did not have an EBA. Dowling also spoke to the representative and complained that Pondeljak did not have an EBA. Following this conversation Dowling said to Pondeljak:
“MR DOWLING: Not a problem. If you don't sign this construction EBA I'll be out looking for you on all the other jobs.”
After a few further exchanges the conversation concluded.
32 Dowling, Pondeljak and Roberts met the following morning. Dowling was accompanied by officials from other unions. After initial pleasantries, Roberts made a comment suggesting Pondeljak might be there to sign an EBA. Dowling said (which the appellant contends is another breach of section s 170NC):
“MR DOWLING: He won't be working until he signs it.”
33 Pondeljak then sought to raise the question of whether he could work on the tools. However, Dowling indicated that he had cancelled Pondeljak's union ticket. There was a discussion about why Dowling had done this which raised the question of “bosses” working on the tools. Pondeljak said he wanted his employees to work and Dowling responded by saying that he would “stop the job”. The appellant relies on this response as evidencing another breach of s 170NC but it is far from clear whether this threat concerned the EBA. There was then a fairly lengthy conversation predominantly relating to “bosses” working on the tools and another threat by Dowling to “stop the job”. Again this is relied upon by the appellant as evidencing a breach of s 170NC, but, equally clearly, it did not relate to the EBA.
34 The conversation continued with references to both the signing of an EBA and Pondeljak wanting to work on the tools. At one point Pondeljak spoke of the structure of his business which led to Dowling responding (a response that the appellant contends is a breach of s 170NC):
“MR DOWLING: Like I said, you're not special, you're no different to anyone else, okay? So you decide what you want to. If you would keep the other blokes working I suggest you fuckin’ sign a construction EBA. You’ve got plenty of other work to do; organising jobs, chasing work, running around—”
35 After a few further exchanges Dowling left indicating to Roberts that he (Roberts) knew “the score” if Pondeljak worked. While this is relied on by the appellant as evidencing another breach, the implied threat was ambiguous in that it could have related to Pondeljak working on the tools or to his employees working when an EBA had not been signed.
36 In this analysis of the primary facts we have indicated that certain parts of the conversations relied upon by the appellant as evidencing a contravention of s 170NC (that is, evidencing an intention to coerce the signing of an EBA) do not support an inference that the statements were made by Dowling for the proscribed purpose. Plainly no such inference was drawn by the magistrate. Our analysis of those passages has been undertaken so that they can be put to one side in assessing the evidence, or at least the direct evidence of, a breach or breaches of s 170 NC.
37 However, the various passages from the transcript of the conversations which are quoted in the above analysis contain language that might be viewed as a threat of the proscribed type. The magistrate concluded for several reasons that it could not be inferred, notwithstanding the language used, that Dowling intended to coerce Pondeljak into signing an EBA. The first of those reasons was that allowance needed to be made for the fact that the conversations involved a somewhat heated discussion on a building site and threatening conduct should not be readily inferred by the use of expletives and the volume of voice employed. We respectfully agree. As to the conversations themselves, the magistrate regarded them as falling into two parts at least for the purposes of ascertaining whether Dowling had engaged in proscribed conduct.
38 The first part was from the commencement of the conversation on Tuesday 27 October to a point in the conversation [on the Wednesday] (referred to in par 31 above) when Pondeljak and Dowling both spoke by telephone to a representative of the head contractor and then made further remarks to each other. From that point on in the conversation on the Wednesday, the magistrate concluded:
“....Mr Pondeljak had no intention of entering into an EBA and was not negotiating any such course. From that point Mr Pondeljak's intention was to confront Mr Dowling with his position and keep repeating the position that he had to work on the site.”
39 The magistrate then referred to a later statement of Pondeljak in which he said that he had explained, on the day before, that he could sign an EBA but if he could not work on the tools his business would not survive and the EBA would mean nothing. The magistrate concluded that any threats by Dowling following the telephone call referred to in par 31 above, were made by Dowling in full awareness of Pondeljak’s position and were made with reference to the consequences of Pondeljak’s attempting to work as a worker on that or any other site. However, the difficulty with this conclusion is that it tends to divorce this part of the conversation from the earlier part which made it clear Dowling wanted Pondeljak to sign an EBA and also discounts quite significantly the actual words used by Dowling quoted in par 31 above. The words used by Dowling convey fairly clearly that it was necessary for Pondeljak to sign an EBA if his employees were to work on the site. Equally clear from the overall context in which the statement was made was the implication that the employees would not be able to work on the site if an EBA was not signed. With respect to the magistrate, the inference that he drew is barely open having regard only to this part of the conversation. For reasons which we will shortly explain, it is not an inference that should be drawn at all when the totality of the conversations on the two days is considered.
40 The ultimate conclusion of the magistrate is set out in par 11 above. It was preceded by various references to the transcript supportive of the following conclusion:
“He (Pondeljak) has no apparent pre-conceived objection to signing an EBA. However, because of his personal and business position the signing of an EBA is pointless. This, as indicated, hardened into a determination, which was conveyed to Mr Dowling that to sign an EBA was effectively meaningless. In the circumstances the conversations rapidly turned into a situation where Mr Pondeljak continued to state his position and Mr Dowling continued to state the Union's position; such positions being irreconcilable. Thereafter it is apparent that a number of the threats made by Mr Dowling are clearly directed to the situation where Mr Pondeljak himself threatens to work on site.
To submit therefore that throughout these two conversations Mr Pondeljak is continuing to simply negotiate the conditions of or the pre-conditions of entering into an EBA is in my opinion not sustainable.”
41 However, with respect to the magistrate, we consider that the language used by Dowling as set out in pars 23, 28, 29, 31, 32 and 34 above was plainly directed to procuring the signing of an EBA by Pondeljak. It is true that Dowling and Pondeljak were at loggerheads about Pondeljak working on the tools and whether Pondeljak's employees could work on site. However the existence of a dispute about those matters does not entail that Dowling had abandoned his demand that Pondeljak sign an EBA. He was clearly persisting with that demand even though Pondeljak had made several statements consistent with his not objecting to signing an EBA. It is clear from the transcript that Dowling could not pin Pondeljak down to an unambiguous undertaking to sign an EBA irrespective of the resolution of Pondeljak’s claim to work “on the tools”. While the focus of the discussions shifted at various points from Pondeljak's right to work on the tools, to signing an EBA, it is difficult to disregard the words used by Dowling which were fairly clearly directed to Pondeljak signing an EBA and, in various ways, contained a threat to Pondeljak if he did not sign. Having regard to the statements actually made by Dowling and the context in which they were made, the magistrate erred in not inferring that the threats were made to coerce Pondeljak into signing an EBA.
42 It follows, subject to one further matter, that the appellant has established a contravention of s 170NC. It will be recalled that the magistrate rejected a submission made on behalf of Dowling and the Union that it was necessary to establish that the sole purpose of the impugned conduct was to coerce a person, for present purposes, to enter into an EBA. That submission was repeated on this appeal in support of a notice of contention filed on behalf of Dowling and the Union. The submission drew attention to that part of s 170NC which speaks of “… intent to coerce …”. That language was contrasted with that used in other sections which are predicated upon conduct and the reason or reasons for that conduct. Reference was also made to the legislative history of some of these provisions.
43 The following are the sections relied upon. Section 170CK, prohibiting termination of employment by an employer for specified reasons, speaks of “… for reasons including any one or more of the following reasons…”. A similar formulation appears in s 298K which proscribes certain conduct of an employer concerning a member of an industrial association. Reliance was placed on the legislative history of this section commencing with s 5 of the Conciliation and Arbitration Act 1904 (Cth). Section 298K was to be contrasted, it was submitted, with ss 298N, 298P, 298Q, 298R and 298S(1). Section 170CL, which requires notification of the termination of employment of a number of employees in specified circumstances for specified reasons, uses the formula “… or for reasons including such reasons…”. Section 170MU prohibits the dismissal of any employee who, amongst other things, engages in protected action, “… wholly or partly because…” the action is engaged in by the employee. A similar formulation appears in s 170WE concerning an employee engaging in industrial action. This is to be contrasted, it was submitted, with ss 170WF and 170WG which refer to “… the intention of…” respectively hindering negotiations relating to an AWA and persuading a person to make or not to make an AWA.
44 The difficulty with this submission is that it pays insufficient regard to what appears to be the plain purpose of s 170NC. That section is found in Pt VIB of the Act which establishes a detailed regime for the creation of certified agreements including procedures for their negotiation, execution and certification. That regime contemplates free bargaining between employers and their employees or organisations of employees and allows the parties to undertake industrial action within a framework created by that Part. It is consistent with the purposes of Pt VIB to treat s 170NC as proscribing conduct which might result in an agreement which is not the product of free bargaining. That result could as well be achieved by conduct which had as only one of a number of objectives the coercion of a person as by conduct which had that as its sole objective.
45 Section 170NC is contravened if a person engages in conduct intending to coerce a person to agree to make an EBA even if the conduct has one or several other purposes or objectives. It is, to adopt the language of General Motors Holden Pty Ltd v Bowling (1976) 51 ALJR 235, sufficient that the proscribed reason is a substantial or operative reason.
46 For these reasons we are satisfied that Dowling has contravened s 170NC(1) though we do not accept that there were multiple offences constituted by the repetition of various threats during the conversations on 27 and 28 October 1998. In any event, the complaint filed on to December 1998 alleged a "Breach of s 170NC" and claimed $10,000 against Dowling. It is fairly plain from the terms of the complaint that one breach, and not several, was alleged (see also par 31 of the accompanying statement of claim which suggests one breach only is alleged). Moreover, the appellant sought in the complaint the maximum penalty ($10,000) prescribed by s 170NF(2) for a breach of a penalty provision. This again points to the allegation having been of one breach and not several.
47 It is necessary now to consider the liability of the Union. As noted earlier, we do not regard the way the case was pleaded as precluding consideration of whether the Union was vicariously liable for the conduct of Dowling or liable by operation of s 349.
48 A preliminary issue is whether the Union, as a matter of law, can be held directly (under Tesco Ltd v Nattrass (supra)) or vicariously liable at common law in penalty proceedings under s 170NC. His Worship dealt with this issue as follows:
“It is necessary to say at the outset that Section 170NC(1) of the Act is properly regarded as a penal provision by virtue of Section 170NF(1). While contravention of Section 170NC is not an offence, and while the standard of proof in these proceedings is the civil standard, for purposes of interpretation and construction this section must be seen as penal, and not, as was suggested by the plaintiff as “remedial”.
The employment of vicarious liability, as it is understood in civil law, has in my opinion, no more validity in penalty proceedings under this Act than it does in respect of criminal proceedings generally. As it was put in Tesco Ltd v Nattrass [1972] AC 153 at 199:
“[…]
But there are some civil liabilities imposed by statute which, exceptionally, exclude the concept of vicarious liability of a principal for the physical acts and state of mind of his agent; and the concept has no general application in the field of criminal law.”
[…] Liability of a body corporate in this case the Union, for the actions of Mr Dowling and the ascription to that body corporate of Mr Dowling’s state of mind, can exist only by virtue of Section 349 of the Act. The inclusion of Section 349 with its obvious purpose operates to exclude any other basis for liability of a principal for the acts of the agent or employee.”
49 The submissions of the parties raised three issues, namely, whether the common law bases of liability were excluded by:
(i) the use of the words “a person must not” in s 170NC(1);
(ii) the presence of s 349 in the Act; and
(iii) the character of s 170NC(1) as a civil penalty provision.
50 It was submitted by Counsel for the Union that the language of s 170NC(1) makes it clear that only primary liability can arise under that provision. It was said that by prohibiting “a person” from engaging in the proscribed conduct, the provision is directly comparable to s 169 of the former Companies (Western Australia) Code which relevantly began with the words “A person … shall not …”. The word “person” included a company: Companies and Securities (Interpretation and Miscellaneous Provisions) (Western Australia) Code s 5. Reference was made to Hamilton v Whitehead (1988) 166 CLR 121 where the High Court (Mason CJ, Wilson and Toohey JJ) said (at 127):
“… s. 169 of the Code speaks directly to the company. It is not a case of a company being made liable for an act performed by a servant of the company on its behalf. The liability imposed is direct, not vicarious.”
51 However, in Hamilton v Whitehead the High Court did not go so far as to say that the contravention of a provision commencing with the words “a person … must not”, cannot occur by operation of common law principles of vicarious liability. The issue before the court in that case was whether the trial judge had erred in holding that it was “wrong and oppressive” to prosecute a managing director as an accessory to acts and decisions that were also relied on as acts of the company in the prosecution of the company under s 169 of the Code. Counsel for the managing director relied on an earlier decision of the High Court in Mallan v Lee (1949) 80 CLR 198 in which it was held that the prosecution had wrongly sought to impose accessorial liability on a company officer under s 5 of the Crimes Act 1914 (Cth) in a prosecution under s 230 of the Income Tax Assessment Act 1936 (Cth). The latter provision was relevantly worded “Any person who, or any company on whose behalf the public officer, or a director, servant or agent of the company … [engages in the proscribed conduct] shall be guilty of an offence”. That provision, Dixon J held, imposed direct liability on the officer and vicarious liability on the company. His Honour said (at 215-6):
“It would be an inversion of the conceptions on which the degrees of offending are founded to make the person actually committing the forbidden acts an accessory to the offence consisting in the vicarious liability for his acts.”
52 By contrast, Hamilton v Whitehead was a case where the company had been made directly, rather than vicariously, liable. Consequently, and in contrast to Mallan v Lee, the court held that there was no conceptual difficulty in making the managing director liable as an accessory. When considered in this context, the observations in Hamilton v Whitehead quoted above refer to the manner in which that case was pleaded and do not exclude the possibility that contravention of s 170NC can arise from both direct liability and common law vicarious liability. Nor is it apparent why the use of the words “a person must not” would preclude that result.
53 It was also submitted by Counsel for the Union that the presence of s 349 in the Act confirms that common law vicarious liability does not apply in penalty proceedings under s 170 NC. The terms of s 349 are set out in par 6 above.
54 Counsel for the appellant submitted to the contrary and referred to Rowe v Transport Workers Union of Australia [1998] FCA 1646,(1998) 160 ALR 66 in which Cooper J considered the interaction between direct corporate liability under the “directing mind” principle in Tesco Ltd v Nattrass (supra) and s 298B(2) and (3) of the Act. Section 298B(2) relevantly provides that for the purposes of Pt XA of the Act, “action done by one of the [prescribed bodies or persons] is taken to have been done by an industrial association”. This provision is similar to s 349(2) in that it deems conduct of prescribed bodies or persons to be conduct of an industrial association, just as s 349(2) deems conduct of prescribed persons to be conduct of a body corporate. Cooper J said (at 81):
“Section 298B(2) and (3), as a matter of construction, are not intended to exclude the operation of the directing mind principle discussed above. Indeed, the operation of the principle and the two sections may overlap.”
55 Counsel for the appellant also referred to two judgments on the same issue in the context of s 84 of the Trade Practices Act 1974 (Cth). Section 84 is in substantially the same terms as s 349 of the Act. In Trade Practices Commission v Queensland Aggregates Pty Ltd (1982) 44 ALR 391, Morling J said (at 404):
“As I understood the submission, s 84(2) was said to be a comprehensive statement of the circumstances in which conduct engaged in by a person on behalf of a corporation could amount to conduct for the purposes of the Act […] [I]t would follow from this argument that the common law principles governing the liability of a corporation for the acts of its servants and agents performed within the scope of their authority have little, if any application […].
I see no basis for attributing this sweeping effect to s 84(2). The sub-section is not expressed to take effect to the exclusion of the common law […] [T]he language of s 84(2) appears to disclose a legislative intention to extend, rather than limit, the liability of corporations for the actions of others. This seems to follow from the reference to the conduct of “any other person” which, in some circumstances, is deemed to be conduct engaged in by the corporation.”
56 In Trade Practices Commission v Tubemakers of Australia Ltd (1983) 47 ALR 719 (“Tubemakers”), Toohey J also concluded that s 84(2) was not intended to exclude the common law saying (at 739):
“In my view s 84(2) is not intended to be an exhaustive statement of corporate responsibility under the Trade Practices Act. It deems certain conduct “to have been engaged in also by the body corporate” (emphasis added) so that conduct by the director, agent, servant or other person becomes as well conduct by the body corporate. It does not seek to make a corporation vicariously responsible; […] conduct of those persons is conduct of the corporation.”
(emphasis added)
57 A similar issue arose before the Western Australian Industrial Appeal Court in Ducasse v Transport Workers Union of Australia (1995) 65 IR 1. The court considered the impact of ss 96E and 96G(2) of the (now repealed) Industrial Relations Act 1979 (WA) on common law vicarious liability. Section 96E (in summary) made it an offence for “a person, including an organisation of employees” to make threats or take action over a person’s non-membership of an organisation of employees. Section 96G(2) provided that if “an officer or member” of an organisation of employees was guilty of an offence against that section, the organisation was also guilty unless it were proved that all reasonable steps had been taken by that organisation to prevent the commission of the offence. If s 96G excluded common law vicarious liability, as was contended by the union in that case, an organisation would not necessarily be liable for the commission of an offence by an agent who was not an officer or member. Franklyn J, with whom Kennedy and Rowland JJ agreed, said (at 6):
“At common law a corporation is vicariously liable for an offence committed by its servant or agent in the course of his employment or agency in the same circumstances as an employer or principal who is a natural person. There is nothing in s 96E or in any other section of the Act, in my opinion, which takes away the application of that common law to an offence committed by an organisation of employees against s 96E.”
58 In our opinion, s 349 operates in the same way. Section 349(2), in substance, deems conduct engaged in by the prescribed persons on behalf of the body corporate to be conduct also engaged in by the body corporate. If that conduct is proscribed conduct under s 170NC(1)(a) or (b) (or an equivalent provision), then the body corporate may be directly liable under that section if the requisite intent is established. To establish intent one turns to s 349(1) which provides that, where “it is necessary to establish, for the purposes of this Act, the state of mind of a body corporate in relation to particular conduct, it is sufficient to show …” (the prescribed things). This form of words clearly contemplates that corporate liability is sought to be imposed under a different provision of the Act from s 349.
59 In our view the presence of s 349 in the Act does not exclude the operation of common law vicarious liability or direct corporate liability under the principles in Tesco Ltd v Nattrass (supra). Rather, it provides an alternative statutory mechanism for imposing direct liability on a body corporate under s 170NC of the Act.
60 Counsel for the appellant submitted that his Worship’s conclusion that vicarious liability has no application to s 170NC by reason of its character as a civil penalty provision, was based on too narrow a view of common law vicarious liability.
61 In our view, common law vicarious liability is not excluded merely because s 170NC can be characterised as a penalty provision. It will be recalled that the passage from the speech of Lord Reid in Tesco Ltd v Nattrass (supra), relied upon by his Worship, spoke of statutes creating civil liabilities only “exceptionally” excluding vicarious liability. There is nothing to suggest that s 170NC falls into that exceptional category. Indeed, it may be doubted whether, even if s 170NC created an offence (which it does not: see s 170NF(1)), vicarious liability would necessarily be excluded (as seems to be the effect of his Worship’s reasoning). That question would probably have to be answered by the application of the following test suggested by Atkin J in Mousell Brothers Ltd v London and North-Western Railway Co [1917] 2 KB 836 at 845, 846 (applied by the High Court in King v Australasian Films Ltd (1921) 29 CLR 195 at 214-215 and by Franklyn J in Ducasse (above)):
“I think that the authorities cited by my Lord make it plain that while prima facie a principal is not to be made criminally responsible for the acts of his servants, yet the Legislature may prohibit an act or enforce a duty in such words as to make the prohibition or duty absolute; in which case the principal is liable if the act is in fact done by his servants. To ascertain whether a particular Act of Parliament has that effect or not regard must be had to the object of the statute the words used, the nature of the duty laid down, the person upon whom it is imposed, the person by whom it would in ordinary circumstances be performed, and the person upon whom the penalty is imposed.”
62 In our opinion, his Worship erred in holding that common law vicarious liability had no application to s 170NC(1).
63 Counsel for the appellant submitted that the Union should be held liable either directly, or vicariously at common law, or by operation of s 349 for Dowling’s breach of s 170NC.
64 For the Union to be directly liable under common law principles, it is necessary to show that Dowling was, as a matter of law, acting not merely as a servant, representative, agent or delegate of the Union, but rather as the “directing mind and will” of the Union when he engaged in the conduct that contravened s 170 NC(1): Tesco Ltd v Nattrass (supra) at 170 per Lord Reid, approved by the High Court in Hamilton v Whitehead (supra) at 127 and Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 514-5.
65 Counsel for the appellant submitted that the evidence established that Dowling was the “mind and voice” of the Union in relation to the dispute with Pondeljak. It was submitted that he was an organiser employed by the Union and was pursuing Union policies and requirements; he was threatening the use of the Union’s powers as well as his own; and there was no evidence that his authority was limited in any way. The evidence does not, in our opinion, support a finding of direct liability under the principles in Tesco Ltd v Nattrass (supra). Dowling was, at best, acting merely as an organiser employed by the Union and could not reasonably be characterised as its “directing mind and will”.
66 Turning to vicarious liability, there is a discernible tension revealed by recent authorities concerning vicarious liability in what might broadly be described as “penal” or “quasi-criminal” proceedings between those which require only that it be shown that the relevant acts were done in the “course of employment”, and those which require positive proof of authority to do the acts.
67 This tension is evident in the recent decisions referred to by Counsel for the appellant of the Supreme Court of Queensland at first instance and on appeal, in Evenco Pty Ltd v Amalgamated Society of Carpenters, Joiners, Bricklayers and Plasterers of Australasia Union of Employees, Queensland [1999] QSC 53 and [2000] QCA 108 (“Evenco”). In that case, the plaintiff, a labour hire company, sought to have the defendant union held vicariously liable for contempt of court by a union organiser. The contempt was said to have occurred upon breach of an undertaking. In 1987, the union and its state secretary had each undertaken “by themselves their servants and agents” not to interfere with the “lawful” supply by the plaintiff company of labour in hire to third parties. The union initially informed its organisers during their training of the existence of the undertaking, but ceased to do so in 1995. It was found that in 1997 an organiser had, in breach of the undertaking, engaged in conduct on a building site which resulted in the transfer of a labourer on hire from the plaintiff to another labour hire company. It was also found that the organiser had mistakenly believed the labourer to be a member of his union, whereas, in fact, the labourer belonged to a rival union.
68 The trial judge, Chesterman J, held that the union was vicariously liable for the contempt of the organiser. His Honour formulated the test for vicarious liability as whether the organiser was acting “in the course of his employment” (at par 68). His Honour then stated (at pars 69-70):
“The concept of course of employment is best understood by having regard to the principles of vicarious liability. According to Fleming, The Law of Torts, 9th edition at p. 421:
“In general terms, the ‘course of employment’ is said to encompass such unauthorised acts by the servant as can be regarded as wrongful and unauthorised modes of performing an authorised task. The precise terms of the authority conferred on him is not the test but rather the function, the operation, the class of act to be done – whatever be the instructions as to the time, the place or the manner of doing it.”
The defendants focus attention upon [the organiser’s] authority, or lack of it, to advance the interests of a member of [a rival union]. The passage from Dr Fleming’s text which is a convenient encapsulation of the principle suggests that focus is misplaced. Rather the question should be was the employee performing a function of a kind which he was employed to do? The answer is clearly in the affirmative. [The organiser] may not have been authorised to advance the particular interests of [the worker concerned] but he was employed, putting aside the undertaking, to do the very sorts of things he did. He was to argue and remonstrate with employers and contractors to secure what he was instructed were the appropriate terms and conditions for building workers who were or might [became] members of the [the defendant union]. It is quite fortuitous that [the employee concerned] was not a member.”
69 On appeal, McMurdo P and Williams J likewise found the union vicariously liable under the “course of employment” test. McMurdo P set out the relevant principles as follows (at pars 5-7):
“It is, I think, settled law that a master or principal is liable if his or her servant or agent breaches an undertaking given by the master or principal in circumstances where he or she is acting on behalf of and within the scope of the authority conferred by the master or principal.
[…] Whilst there was no evidence that [the organiser] had specific authority to act as he did in offending the undertaking, his actions were committed in the course of his employment whilst he was performing a function consistent with his duties as a union organiser; the necessary authority may be tacit […].
[The union] was obliged to take all reasonable steps, including, if necessary, the specific withdrawal of authority and even disciplinary action, to ensure that its responsible officers and their delegates who may handle matters within the scope of the undertaking, complied with the undertaking […].”
70 Pincus JA held that the union had breached the undertaking but reached that conclusion on a different basis to the trial judge and McMurdo P and Williams J. His Honour first considered the principles governing vicarious liability (at pars 25-27 and 30):
“[T]he law in England has developed in the direction of holding the blameless employer liable for unauthorised acts of an employee, in breach of an injunction. The qualification of this is that the employee must be shown to have acted “in the course of employment”, in the sense in which that expression is used in the law of tort. Under the law of tort an employer may be held liable for his servant’s acts, although clearly unauthorised: Deatons Pty Ltd v Flew (1949) 79 CLR 370 at 381, 384, 385, Morris v C W Martin & Sons Ltd [1966] 1 QB 716 at 740, 741; that is so even if the unauthorised act is done purely for the servant’s own purposes: Lloyd v Grace Smith & Co [1912] AC 716. That is the difference between an act done “in the course of employment” and one which is actually authorised; an employee’s act may be in the course of employment although unauthorised, for example because forbidden. […]
Vicarious liability for contempt is an important matter, since all contempt proceedings must realistically be seen as criminal in nature and require proof beyond reasonable doubt: Witham v Holloway (1995) 183 CLR 525 at 534. An employer should not, one would expect, ordinarily be held liable in proceedings which are of that kind, on the basis of actions of an employee which have been forbidden; particularly is that so when one considers that even a finding of contempt against an employer may do serious damage, leaving aside the prospect of punishment such as fines or imprisonment.
My conclusion is, as will appear, that the English doctrine of strict vicarious liability to which I refer should not be followed, in this country. The proper rule is that the employer must be shown to have authorised the act complained of or shown not to have taken proper steps to prevent it. In the present case, the judge held [the union] liable on the “course of employment” test and that in my respectful opinion was not the proper test.
[…]
Looking at the doctrine developed in England from the Australian perspective, on the basis that what is involved is a criminal or quasi-criminal proceedings, the result arrived at there is unattractive, insofar as it can make an absolutely blameless person vicariously liable for the unauthorised act of an employee; vicarious liability for criminal acts is the exception, not the rule.”
71 On the issue of the organiser’s authority to engage in the offending conduct, Pincus JA said (at par 23):
“The learned primary judge did not find against the union that it had authorised [the organiser’s] action. His Honour was right not to find that against the union because [the state secretary’s] evidence to the effect that it was not authorised was not contradicted, nor was it challenged in cross-examination. The fact of authority had to be proved beyond reasonable doubt and there was nothing to prove it. Inferences from what union organisers generally do could not fill the gap, nor could it be filled by judicial knowledge; if the question was simply whether [the organiser] had actual authority to act as he did, the case against the union had to fail.”
72 Pincus JA continued (at par 27):
“The proper rule is that the employer must be shown to have authorised the act complained of or shown not have taken proper steps to prevent it. In the present case, the judge held [the union] liable on the “course of employment” test and that in my respectful opinion was not the proper test.”
73 Pincus JA found (at pars 33 and 34) that while there was no evidence that the organiser’s conduct had been authorised by the union, there was sufficient evidence to support a conclusion that the state secretary had failed to take proper steps to ensure that the organiser complied with the undertaking, and that the neglect of the state secretary should be treated as the neglect of the union, under the principles in Tesco Ltd v Nattrass (supra).
74 Evidence of authority was similarly required by Keely J in GTS Freight Management Pty Ltd v Transport Workers Union of Australia (1990) 25 FCR 296 at 307 and by Merkel J in Australian Industry Group v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2000] FCA 629 at par 48, which were, like Evenco, proceedings for contempt of court.
75 There is force in Pincus JA’s view in Evenco that in proceedings of a “quasi-criminal” nature, such as proceedings for civil contempt, vicarious liability should not be determined by the strict application of the “course of employment” test. A less stringent approach would expose a body corporate to liability by virtue of the conduct of an employee, however aberrant it might be, as long as it could be characterised as “in the course of employment”. The same considerations apply, in our opinion, to proceedings for a penalty in respect of proscribed conduct and intent under s 170NC. Consequently, to establish vicarious liability under s 170NC it is necessary to adduce evidence which establishes, on the balance of probabilities, that the act complained of was authorised. To use the language of Pincus JA, neither “inferences from what [the relevant employees] generally do” nor “judicial knowledge” are sufficient. That approach accords generally with observations of Moore J made in Kelly v Construction Forestry Mining and Energy Union (1994) 129 ALR 109 at 118.
76 In light of the requirement to prove authority to establish either vicarious liability or liability under s 349, it is next necessary to consider what kind of authority must be proved in each case. If it is sought to be proved that an act was authorised, actual authority must be shown, although the authority might be a broad one, encompassing a class of acts into which the act complained of falls. Furthermore, it is well established that, once authority to engage in certain tasks is proved, vicarious liability extends to unauthorised modes of performing those tasks: see Macken, O’Grady and Sappideen The Law of Employment 4th ed., 1997 pp. 356 and 360. If it is sought to be proved that the employer is liable because he or she failed to take proper to steps to prevent the acts complained of (in, for example, contempt proceedings involving breaches of an undertaking), it must be shown that there were circumstances which required the employer to take steps and that the steps, if any, taken by the employer were insufficient to avoid vicarious liability.
77 Section 349(2) operates where the relevant conduct is engaged in by an “officer, director, employee or agent” of the body corporate “on behalf of” the body corporate and “within the scope of his or her actual or apparent authority”. It will be recalled that s 349 is in substantially the same terms as s 84 of the Trade Practices Act 1974 (Cth). In Walplan Pty Ltd v Wallace (1985) 8 FCR 27, Lockhart J (with whom Sweeney and Neaves JJ agreed) said of the latter provision (at 38):
“Section 84(2) is an enlarging provision of general application under the Act. It extends to proceedings, both civil and criminal, and is designed to eliminate the necessity to apply the various and at times divergent tests of the common law relating to a corporation's responsibility for the acts of its servants or agents. It extends those common law principles in order to facilitate proof of a corporation's responsibility.”
78 As to the scope of the words “on behalf of”, in Walplan Pty Ltd v Wallace Lockhart J said, at FCR 37, of the same phrase in s 84(2) of the Trade Practices Act that it “is not one with a strict legal meaning and it is used in a wide range of relationships. […] [It] casts a much wider net than conduct by servants in the course of their employment, although it includes it.” We are satisfied that Dowling was acting “on behalf of” the Union when he engaged in the conduct that contravened s 170NC. No submission to the contrary was put by Counsel for the Union.
79 There remains the question of whether he was so doing “within the scope of his or her actual or apparent authority”. To establish apparent authority, it is not sufficient to show merely that an “officer, director, employee or agent” held himself or herself out as having authority: see J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers – Western Australian Branch (1992) 111 ALR 502 at 533-534 per French J. Rather, there must at least be circumstances which would justify a belief on the part of a person dealing with the “officer, director, employee or agent” that that “officer, director, employee or agent” is acting with authority.
80 Counsel for the Union submitted that the only evidence adduced by the appellant which went to the issue of authority was the Union rules, and that the appellant had failed to prove positively that Dowling had been authorised to engage in unlawful conduct. The rule relied on was Rule 5, which relevantly provided:
“5. STATE ORGANISERS
State Organisers shall be responsible for the general organising of the Union in the State. They shall carry out such other organising duties as are allocated to them by the State Council and shall be responsible to the State Secretary.
[…]”
81 However, that submission overlooks the way in which the case was pleaded. In par 3 of its particulars of claim, the appellant alleged that Dowling is and was at all material times “authorised to act on behalf of the Union in respect of industrial and employment disputes concerning the Union and its members”. In the defence, this contention was admitted “save that [Dowling’s] authorisation extends only to lawful conduct”.
82 The first question raised by that response to par 3 is whether Dowling was acting “on behalf of the Union in respect of industrial and employment disputes concerning the Union and its members” when he engaged in the conduct which contravened s 170NC. When Dowling breached s 170NC, he was, in broad terms, agitating the issues of whether Pondeljak should sign an EBA and whether a “boss” should work on the tools. In our view, these issues arise from an industrial or employment dispute concerning the Union and its members and Dowling was, in raising them, acting “on behalf of the Union”.
83 The second question is whether the Union can escape liability by denying that Dowling was authorised to engage in unlawful conduct. It is unclear what precise form the submission of the Union takes. If it be that unlawful conduct per se lies outside the scope of Dowling’s contract of employment, the answer lies in the following comment of Toohey J in Tubemakers (above, at ALR 742):
“It may be assumed to be an implied term in every contract of employment that the servant or agent will not act unlawfully. And that will have consequences between employer and employee. Yet unlawful conduct has not been held inevitably to be outside the scope of employment.
On the contrary, if a servant or agent has authority to enter into transactions of the sort in question, it is no answer for a principal to say that in the particular circumstances the servant or agent acted wrongfully: Australasian Brokerage Ltd v Australia and New Zealand Banking Corporation Ltd (1934) 52 CLR 430 at 451-2.”
84 If the submission be that unlawful conduct per se is not permitted by the union rules, the answer lies in the recent comments of Einfeld J in Employment Advocate v National Union of Workers [2000] FCA 710 (at par 119):
“Union rules are hardly likely to accommodate conduct that contravenes the law, but that does not mean that unlawful conduct can never be attributed to the union, as the Act clearly seeks to do.”
In any event, Rule 5 was the only relevant rule in evidence, and it, by itself, sheds little light on the scope of Dowling’s discretion.
85 Given the concession or admission made by the Union in its defence, we find that when Dowling breached s 170NC, he was performing tasks that he had apparent authority from the Union to perform. The Union’s bare denial that this authority did not encompass unlawful conduct does not take the conduct outside the authority. Consequently, the Union is vicariously liable, or liable by operation of s 349, for Dowling’s breach of s 170NC(1).
86 The orders we should make are that the appeal is allowed, declaratory orders that Dowling and the Union breached s 170NC and an order remitting the matter to the magistrate to deal with the question of penalty.
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I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment herein of this Honourable Court. |
Associate:
Dated: 24 August 2000
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Counsel for the Applicant: |
Mr A L Cavanough QC with Mr B Lawrence |
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Solicitor for the Applicant: |
Australian Government Solicitor |
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Counsel for the Respondent: |
Mr H Borenstein |
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Solicitor for the Respondent: |
Maurice Blackburn Cashman |
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Date of Hearing: |
16 May 2000 |
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Written submissions closed: |
4 July 2000 |
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Date of Judgment: |
24 August 2000 |
