FEDERAL COURT OF AUSTRALIA

Finance Sector Union of Australia v Commonwealth Bank of Australia

[2000] FCA 1468

INDUSTRIAL LAW – certified agreements – whether proceedings for interpretation commenced by union intended to coerce employer to enter into certified agreement contrary to s 170NC of the Workplace Relations Act 1996 (Cth) – whether during bargaining period action taken to advance or detract from a party’s position in that process amounts to coercion – whether in considering an inference of intention to coerce contrary to s 170NC it is relevant to consider likelihood of coercion – whether proceedings an abuse of process – where immediate purpose of action is within jurisdiction no abuse of process

PRACTICE & PROCEDURE – abuse of process

WORDS AND PHRASES –  “coerce”, “duress”, “abuse of process”

Workplace Relations Act 1996 (Cth)ss 166A, 170LJ, 170LK, 170LR, 170LT, 170LV, 170LX, 170MC, 170MD, 170MG, 170MT, 170NB, 170NC, 170NG, 170WF, 170WG, 298M, 413, 413A

Hanley v Automotive Food Metals Engineering Printing & Kindred Industries Union [2000] FCA 1188 referred to

Construction Forestry Mining and Energy Union v Multiplex Constructions Pty Ltd (2000) 95 IR 225 distinguished

National Workforce Pty Ltd v Australian Manufacturing Workers Union (No 2) (1997) 76 IR 200 referred to

Finance Sector Union v Commonwealth Bank of Australia [2000] FCA 1372 distinguished

Allen v Flood [1898] AC 1 cited

Hodges v Webb [1920] 2 Ch 70 cited

White v Riley [1921] 1 Ch 1 cited

 Goddard v Osborne (1978) 35 FLR 122 cited

Schanka v Employment National (Administration) Pty Ltd (2000) 170 ALR 42 followed

Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 applied

Barton v Armstrong [1973] 2 NSWLR 598 cited

Australasian Meat Industry Employees Union v Peerless Holdings Pty Ltd [2000] FCA 1047 referred to

Maritime Union of Australia v Burnie Port Corporation Pty Ltd [2000] FCA 1189 referred to

Australian Workers Union v Yallourn Energy Pty Ltd (1999) 95 IR 207 ([2000] FCA 65) distinguished

CFMEU v Master Builders Association of Victoria (No 1) [2000] FCA 168 referred to

CFMEU v Mirvac Constructions Pty Ltd (2000) 96 IR 458 ([2000] FCA 341) referred to

Auspine Ltd v CFMEU [2000] FCA 501 referred to

Australian Paper Ltd v Communication, Electrical, Electronic, Information, Postal, Plumbing & Allied Services Union of Australia (1998) 81 IR 15 referred to

Williams v Spautz (1991-1992) 174 CLR 509 applied

Macquarie Dictionary 3^rd Ed, 1997

New Shorter Oxford English Dictionary, 1993

FINANCE SECTOR UNION OF AUSTRALIA v COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)

N 639 of 2000

N 640 of 2000

GYLES J

SYDNEY

17 OCTOBER 2000

THE COURT ORDERS THAT:

1.                  In each matter the cross-claim is dismissed.

2.                  Costs reserved until further order.

3.                  Proceedings stood over for hearing of the applications.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

N 640 OF 2000

REASONS FOR JUDGMENT

1                     On 16 June 2000, the Finance Sector Union of Australia (“the Union”) applied, by separate proceedings, to the Court:

(1)        for an interpretation of an award under s 413 of the Act;

(2)       for an interpretation of a certified agreement under s 413A of the Workplace Relations Act 1996 (Cth) (“the Act”).

2                     On 26 July 2000, in each proceedings, the respondent, Commonwealth Bank of Australia (“the Bank”), filed a cross-claim for:

 “1.     A declaration that the filing of, and taking further steps to progress, the Application in this Honourable Court in matter No. …is “action” for the purpose of section 170NC(1) of the Workplace Relations Act 1996 (Cth).

2.                  An order that proceedings initiated by the Applicant in matter No. … be dismissed as being prohibited action within the meaning of section 170NC(1) of the Workplace Relations Act 1996 (Cth).

3.                  In the alternative to the order referred to in paragraph 2 above, an order that the Applicant not take any further steps to progress its Application in matter No. … of this Honourable Court.

4.                  An order imposing a penalty on the Applicant for contravening section 170NC of the Workplace Relations Act 1996 (Cth).

Particulars of Contravention

(a)               The filing and progression, at the request of the Applicant, of matter No. …is “action” for the purposes of section 170NC of the Workplace Relations Act 1996 (Cth).

(b)               The “action” referred to in paragraph (a) of these particulars is taken by the Applicant for a purpose prohibited by section 170NC(1) of the Workplace Relations Act 1966 (Cth).

(c)               The “action” referred to in paragraph (a) of these particulars is not protected action for the purposes of section 170NC(2) of the Workplace Relations Act 1996 (Cth).”

3                     An interlocutory hearing on the issues raised in the cross-claims was commenced before me on 1 September 2000.   Interlocutory proceedings are inherently unsatisfactory in this field.  The proper construction and application of s 170NC has not been settled – indeed, there has only been one reported decision of a superior court on anything but an interlocutory basis, and that was an appeal from a magistrate (Hanley v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2000] FCA 1188 (“Hanley”)).  This may be the explanation for the wide potential operation of the section which has been attributed to it in some interlocutory decisions.  This uncertainty as to the scope of the section, together with the undemanding manner in which the test for interlocutory injunctions has been applied in many of the cases arising under the Act, leads to the very real possibility that applicants for interlocutory injunctions may obtain undue advantage (both tactical and otherwise) in ways which may not all be perceived by judges granting the injunction.  The industrial negotiations may be over before a final judgment is obtained.  It is also wasteful of the time and resources of the Court and the parties to have both a contested interlocutory hearing and a final hearing.  I therefore determined to fix an early final hearing of the matter, rather than complete the interlocutory hearing, in the hope that it could be disposed of prior to the time tentatively fixed for hearing of the substantive applications.  The parties co-operated in this endeavour, and the matter has been conducted thoroughly but with commendable dispatch.  The time taken by the final hearing has been shortened by reason of the fact that I read the relevant evidence and a number of the relevant authorities during the course of the aborted interlocutory hearing. 

4                     The relevant events and instruments from a statutory point of view may be summarised as follows:

(1)       31 December 1990 – certification of the Commonwealth Bank of Australia Officers Award 1990 (“the 1990 award”).

(2)       1 April 1998 – various certified agreements were entered into between the Union and the Bank, including the Commonwealth Bank of Australia Enterprise Bargaining Agreement 1998 (“the certified agreements”) for a term of two years.

(3)       24 August 1999 – certification of the Commonwealth Bank of Australia Employees Award 1999 (“the 1999 award”).

(4)        2 April 2000 – the term of the certified agreements had expired.

(5)       5 April 2000 – the Union initiated a bargaining period pursuant to s 170NI of the Act in relation to negotiations for an enterprise agreement.

5                     The issues sought to be determined in the substantive applications relate to a dispute between the parties as to whether new procedures which the Bank have announced, and partly implemented, as to the assessment of performance of employees are in accordance with (a) the awards and (b) the certified agreements which continue in force notwithstanding their expiry (s 170LX of the Act).  There is no doubt that the dispute exists, and that it has continuing relevance as the 1999 award and the certified agreements remain operative.  The Union contends that, in these circumstances, it is entitled to invoke the statutory jurisdiction of the Court to interpret the 1999 award and the certified agreements.  Whilst accepting this in principle, the Bank contends that, when the sequence of events is taken into account, the proceedings were brought when they were, and in the form they were, in order to coerce the Bank in relation to negotiations which were on foot for a certified agreement contrary to s 170NC.

6                     At the time the applications were made, the bargaining period initiated on 5 April was still on foot, and negotiations were continuing as no agreement had been reached. On or about 29 May, the Union notified the Bank of its intention to take industrial action on 9 June, in the form of a 24-hour strike, and that action took place as notified.  There was a meeting as late as 22 June between the parties for the purposes of those negotiations which did not resolve the matter.

7                     The method of assessment of performance of employees is one of the unresolved issues in the negotiations for an enterprise agreement.  By no later than January 1999 the Union was aware of the Bank’s proposals for what is known as a PFR system rather than the existing PDR system, and the contemporaneous correspondence shows that the issue as to whether those proposals would or would not breach the then award and the certified agreements was identified, with each party taking a different view.  Implementation of the changes commenced in relation to the review of performance of staff for the financial year ended 30 June 1999 in relation to some, but not all, employees, and not, apparently, in relation to the bulk of the staff concerned with retail operations.  It was clear, however, that the Bank was intent upon introducing its proposals across the board in due course.

8                     Negotiations between the Union and the Bank have continued, on and off, virtually since the certified agreements were entered into in April 1998, and there were some aborted proceedings by the Union to vary the 1990 award and the 1999 award.  On 24 December 1999, the Union provided to the Bank a copy of its claim on behalf of its members.  This included a claim for the restoration of the Bank’s former PDR performance review system.  There were negotiations from early 2000 until 6 March 2000, when the Bank wrote to the Union and outlined its position in relation new agreements to replace the existing enterprise bargaining agreements which involved rejection of the Union’s proposals.  As I have said, negotiations continued during the later formal bargaining period.

9                     Having considered the contemporaneous correspondence, the affidavit evidence and the cross-examination of Mr Riordan from the Union, I am satisfied that the proceedings were brought by the Union at the time they were and in the form they were because of the state of negotiations about the new agreements and with intent to influence the outcome of those negotiations. 

10                  The most direct evidence which bears upon that question was given by Mr Matthews, an executive of the Bank, concerning a bargaining meeting held on 27 June – the day after the filing of the applications.  He gave evidence that Mr Hill (from the Bank) said words to the effect of  “This action should be withdrawn or held in abeyance until we reach an agreement” and that Mr Riordan (from the Union) responded with words to the effect of  “We will not withdraw the action unless we get an EBA agreed.  If we get an outcome, it will go”.  Mr Riordan denied using those precise words.  Minutes were taken by both a Bank employee and a Union employee of that meeting.  The Bank minutes are not precisely in accordance with the recollection of Mr Matthews – they record Mr Hill as saying “Can the application be held in abeyance until we reach an agreement on the EBA?”, with Mr Riordan responding “We could possibly defer it but we will not withdraw unless we have an EBA agreement”.

11                  The Union minutes are rather fuller, and, so far as is relevant, are as follows:

“RK:   None of the issues that we want to talk about are involved in the case.

PH:     But there are issues that will intersect with the case and they will be trotted out.

PR:      This is an interpretation of the existing scale and interaction of the Award provision, I have not sought to pursue a breach, we just want clarity if it is needed.

JM:      Maybe it can go back on the agenda, it would be silly to talk about it before we have seen what you want to talk about.

RK:      I am drafting some clauses, but I am not quite there yet.

PH:     The risk you run is the question around allowability of the items you are seeking a judicial interpretation of.

PR:      In terms of our discussions here, it is our objective to achieve an outcome that is acceptable to employees.  What we have proposed is based on the PFR system.

PH:     It is an industrial tactic, and depending on which way it goes, it has the potential to de-rail negotiations.

PR:      Clearly it is defense not a coercive mechanism for us.  If we agree on the new structure, interpretation of the old structure is irrelevant.

 PH:    If you are successful in the Federal Court, notwithstanding agreement to something here, you have the right to take action retrospectively.

PR:      That’s correct, but we are not seeking to do that.  You know that we found your unilateral action offensive.  I can see your point, and that is why we held off.  The next PFR period is coming up and to withdraw the case, we would want to reach an outcome on a new remuneration structure including practices around PFR to provide fairness.  We will put these in a tangible form.

JM:      We need to think about the interaction of issues.  You draft a clause that addresses the items, and if you send us this and the four issues you want to talk about, we will have a think about how to respond.

PH:     I am just floating this idea, but would you consider holding the action in abeyance until such a time when we are in a position to give it a fair shake?

PR:      That may be possible.”

(JM is Mr Matthews, PH is Mr Hill (each from the Bank), PR is Mr Riordan and RK is another Union official.)

12                  The only witness cross-examined was Mr Riordan, and he was not cross-examined on this precise issue.  I do not see any essential difference between the versions given.  Indeed, the version recorded in the Union minutes is, if anything, more favourable to the Bank’s cross-claim than the other sources.  They make clear at least the following:

(1)               The Union’s proposal for performance review was based upon the principles contained in the Bank’s proposed PFR system rather than the previous PDR system.

(2)               The application for interpretation would be dropped in the event that there was an agreement, not just on the performance issues, but on other issues, including remuneration.

(3)               That if there was agreement the Union would not pursue retrospectively any breaches of the award or agreement which might have taken place to that time.

(4)               The Union was prepared to favourably consider adjournment of the proceedings pending negotiations for an overall enterprise bargaining agreement or agreements.

Mr Riordan acknowledged, in the course of his cross-examination, the connection between the proceedings and the negotiations, and also accepted that if the Union’s position was vindicated by the Court then the Bank would be likely to suffer some economic detriment.  There is no dispute that the mind of Mr Riordan was relevantly the mind of the Union.

13                  I find that the decision to commence the proceedings when they were commenced was solely related to the state of negotiations.  In my view, they were seen as playing at least two roles.  The first was to settle the benchmark from which negotiations should proceed in relation to performance reviews.  Whilst, in a sense, all balls were in the air in relation to the new agreement, if the Bank were right then no concessions had to be obtained from the Union in relation to the PFR system, whereas if the Union were right, the Bank would need a concession before it could be altered.  In other words, the bargaining position of the Union would be improved if the proceedings were successful.  The fact that both sides recognised that a form of PFR would be the outcome is not to the point.  The second aspect was that the bargaining position of the Union would be improved because, if successful, there might well be back claims which could be pursued against the Bank and action might be taken to prevent the Bank from continuing with its use of the PFR system.  These circumstances were seen to be an advantage to the Union in the bargaining, not just in relation to performance review but generally, as there would be an incentive for the Bank to agree to an overall enterprise bargaining agreement (or agreements) rather than risk losing the proceedings.  When Mr Hill was recorded in the Union minutes as describing the proceedings as an industrial tactic, in a sense he was correct.  The existence of the proceedings was, in my opinion, intended to be, in the sense I have described, a bargaining chip.  This use of the proceedings was, in my view, intended to influence the attitude of the Bank to the negotiations in order to induce the Bank to accept aspects of the negotiations more favourable to the Union than would otherwise have been the case.  The form of the proceedings – being for interpretation rather than enforcement – is consistent with this conclusion.

14                  There is no suggestion that the Union did not have a bona fide belief in the merit of the case, nor that it was not intended to pursue them to a conclusion if necessary.  Indeed, the greater the merit of the case the greater would be its impact upon the bargaining process. 

15                  Mr Hodgkinson, for the Bank, submits that, on the authorities, these findings of fact are ample to establish contravention of s 170NC and are a proper foundation for the orders sought in the cross-claim.  That section is as follows:

“170NC   (1)  [Coercion to make certified agreements]   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)        [Exception]   Subsection (1) does not apply to action, or industrial action, that is protected action (within the meaning of Division 8).

(3)        [Coercion not to make request]   An employer must not coerce, or attempt to coerce, an employee of the employer;

(a)               not to make a request as mentioned in subsection 170LK(4) in relation to an agreement that the employer proposes to make;  or

(b)               to withdraw such a request.”

16                  He submits that:

(1)               The words “any … other action” cannot be read down and would plainly encompass the bringing of these proceedings, and referred me to a series of cases in which anti-suit injunctions have been granted or contemplated, to which I shall return.

(2)               It was decided by the Full Court in Hanley that the intent in question does not have to be the sole intent for the action.

(3)               Where bargaining is in progress for enterprise agreements, to take action with intent to advance a position in the bargaining process, or detract from the position of a party in the bargaining process, would be to contravene s 170NC(1), to adapt the words of Marshall J in Construction, Forestry, Mining and Energy Union v Multiplex Constructions Pty Ltd (2000) 95 IR 225 at 229 (par 27).   A number of other authorities were cited in support of this proposition.

(4)               It was only intent which had to be proved, and it is irrelevant to consider whether or not the action might have succeeded.

(5)               The purpose of the section, taken in context, is to ensure that, apart from protected industrial action, bargaining between the parties should be on a completely free and equal basis, quarantined from external influences.

17                  It was submitted on behalf of the Union that the counterclaims are misconceived because the section is limited to intent to coerce, meaning to compel or overbear the will of the other party, and that there is no proper basis for finding that such an intention was held by or on behalf of the Union.  It was also submitted on behalf of the Union that action could not coerce in the relevant sense unless it were wrongful, illegitimate or unlawful.  Counsel for the Union submitted that the authorities did not establish propositions 1, 3 and 5 put for the Bank, and that if they, or any of them, did, they or it should not be followed.  Other submissions were made for the Union, which I need not reproduce here.

18                  The critical question is the meaning of the word “coerce” in s 170NC.  There is an inconclusive discussion of that question by the Supreme Court of Victoria Court of Appeal in National Workforce Pty Ltd v Australian Manufacturing Workers’ Union (No 2) (1997) 76 IR 200 at 221.  The only other general statement in the cases which have dealt with the section to which I have been referred is that by Finkelstein J in his interlocutory judgment in Finance Sector Union v Commonwealth Bank of Australia [2000] FCA 1372, where his Honour said (at par 44):

“What constitutes coercion?  Presumably it is no more than one form of inducement, but a particularly nasty form. A person will coerce another to act in a particular way if the first person brings about that act by force.  It is for that reason that a threat will amount to coercion.  Coercion will cause a person to act in a way that is, in a sense, non‑voluntary (I do not mean involuntary in the legal sense).”

That was said in a context in which his Honour was considering s 298M as well as s 178NC.  That section is as follows:

“298M            An employer, or a person who has engaged an independent contractor, must not (whether by threats or promises or otherwise) induce an employee, or the independent contractor, (as the case requires) to stop being an officer or member of an industrial association.”

19                  The Macquarie Dictionary defines “coerce” in the following way:

“1. To restrain or constrain by force, law, or authority; force or compel, as to do something.  2. To compel by forcible action.”

The New Shorter Oxford English Dictionary defines “coerce” as:

“1. Forcibly constrain or impel (into obedience, compliance, etc);  force or compel to do.  (b)  Enforce.   2. Enforce obedience;  use coercive measures.”

“Coercion” is defined in the New Shorter Oxford English Dictionary as:

“1. Constraint, restraint, compulsion;  the controlling of a voluntary agent or action by force.  2. The faculty or power of coercing or punishing;  the power to compel assent.  3. Government by force;  the employment of force to suppress political disaffection and disorder.  4. Physical pressure;  compression.  Now rare.”

20                  The legal dictionaries refer to  line of authority which was summarised in National Workforce v AMWU (No 2) (supra) at 221 as holding that the word “coerce” required wrongful, illegitimate or  illegal action or, at any rate, the negation of choice (Allen v Flood [1898] AC 1 at 98, 128-9;  Hodges v Webb [1920] 2 Ch 70 at 86-7;  White v Riley [1921] 1 Ch 1;  and Goddard v Osborne (1978) 35 FLR 122).  I confess to having some difficulty in understanding the discussion of a legal as opposed to an ordinary meaning of “coercion” in National Workforce v AMWU (No 2) at 221.  All of the dictionary meanings involve the negation of choice or compulsion.  In my opinion, there is a significant difference in ordinary meaning between concepts such as influence, persuasion, inducement and the like, on the one hand, and coercion, on the other. 

21                 In my opinion, the decision of the Full Court in Schanka v Employment National (Administration) Pty Ltd (2000) 170 ALR 42 (“Schanka”) provides authoritative guidance, although it related to the meaning of the word “duress” in s 170WG.  The precise point of Schanka, namely, whether duress in s 170WG focused on the perpetrator or the victim, does not arise in this case as it is clearly upon the perpetrator here because of the requirement of intent in s 170NC.  However, all that is said in pars 8 to 24 is relevant to the present issues.  If there is a difference between duress and coercion, it is not, in my opinion, material here.  The difference between certified agreements and Australian workplace agreements, whilst significant, does not affect this issue.  Paragraph 18 is of particular significance:

            “18.     The distinction between the pressure applied to an actor which constitutes duress both in its ordinary English meaning and its connotation in the general law, and the consequences as a matter of law which may attend the application of that pressure, was recognised, we consider, by Lord Scarman in Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] 1 AC 366 at 400 where his Lordship said:

            It is, I think, already established law that economic pressure can in law amount to duress;  and that duress, if proved, not only renders voidable a transaction into which a person has entered under its compulsion but is actionable as a tort, if it causes damage or loss:  Barton v Armstrong [1976] AC 104 and Pao On v Lau Yiu Long [1980] AC 614.  The authorities upon which these two cases were based reveal two elements in the wrong of duress:  (1) pressure amounting to compulsion of the will of the victim;  and (2) the illegitimacy of the pressure exerted.  There must be pressure, the practical effect of which is compulsion or the absence of choice.  Compulsion is variously described in the authorities as coercion or the vitiation of consent.  The classic case of duress is, however, not the lack of will to submit but the victim’s intentional submission arising from the realisation that there is no other practical choice open to him.  This is the thread of principle which links the early law of duress (threat to life or limb) with later developments when the law came also to recognise as duress first the threat to property and now the threat to a man’s business or trade.”

22                  The Full Court in Schanka also cite, with apparent approval, a passage from the judgment of McHugh JA in Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 46 (“Crescendo”) which included the following:

“Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct.  But the categories are not closed.  Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress.”

23                  This passage from Crescendo also cited with approval a passage from the advice of Lord Wilberforce and Lord Simon of Glaisdale in Barton v Armstrong [1973] 2 NSWLR 598 at 633 which included:

“…in life, including the life of commerce and finance, many acts are done under pressure, sometimes overwhelming pressure, so that one can say that the actor had no choice but to act.  Absence of choice in this sense does not negate the consent in law:  for this the pressure must be one of a kind which the law does not regard as legitimate.  Thus, out of the various means by which consent may be obtained – advice, persuasion, influence, inducement, representation, commercial pressure – the law has come to select some which it will not accept as a reason for voluntary action:  fraud, abuse of relation of confidence, undue influence, duress or coercion.”

24                  See also the caution as to too readily finding economic duress by Finn J in Australasian Meat Industry Employees Union v Peerless Holdings Pty Ltd [2000] FCA 1047 at par 54, in which the Crescendo test was applied on a final hearing in relation to s 170WG.  Ryan J also recently referred, with approval, to the Crescendo test in relation to an alleged breach of s 170WG in his final decision in Maritime Union of Australia v Burnie Port Corporation Pty Ltd [2000] FCA 1189 – see pars 71 and 72.  The decision of the Full Court in Hanley does not assist in resolving the present problem because, assuming, as I do, that economic sanctions might be action taken with intent to coerce, then it was a clear case – the Union organiser, inter alia, threatened to exclude the subcontractor from the site until a particular agreement was entered into.  It was a take it or leave it proposition which negated the choice of the subcontractor.

25                  I am satisfied that the ordinary meaning of “coerce”, the line of cases beginning with Allen v Flood (supra) to which I have referred (particularly in an industrial setting) and the authorities in relation to s 170WG, particularly that of the Full Court in Schanka, all point in the same direction, and are to be applied.  This conclusion is directly contrary to proposition (3) put by Mr Hodgkinson, and requires further consideration of his propositions (1) and (5). 

26                  The genesis of proposition (3) (see par 16) is to be found in the interlocutory judgment of Merkel J in Australian Workers Union v Yallourn Energy Pty Ltd (1999) 95 IR 207 ([2000] FCA 65).  In that case (as here) the parties were engaged in bargaining during a bargaining period initiated pursuant to s 170MI of the Act. Industrial action caused the Yallourn Energy site to cease functioning, leading to financial losses by Yallourn Energy of many millions of dollars (and serious power shortages in Victoria).  The unions claimed that the industrial action was protected action for the purposes of the immunity granted under s 170MT(2).  Merkel J held that on a prima facie basis on the evidence before him it was likely that the action was protected.

27                  Yallourn Energy gave notice to the Industrial Relations Commission (“IRC”) under s 166A of the Act of its intention to bring an action in tort against the unions and their officers, members and employees arising out of the industrial action.  In the event, a certificate was only sought in relation to the conduct of the unions and not of its members.  The IRC granted the certificate, with the consequence that Yallourn Energy was entitled to commence proceedings in tort in relation to the industrial action.  Proceedings were brought by the unions to restrain the bringing of any such proceedings as to do so would be a breach, inter alia, of s 170NC(1) of the Act.  Reliance is placed on behalf of the Bank upon the following passage from the judgment (at 73) in relation to the finding that there was a serious issue to be tried under s 170NC:

“There is a degree of unreality about the submission of counsel for Yallourn Energy that the threatened proceeding is extraneous to and is unconnected with the employer’s bargaining position in relation to the new enterprise agreement.  Earlier in these reasons I outlined the steps taken by the various parties in the course of the present dispute.  In my view each step and counter step by the parties in the current dispute appears to be intended to advance their respective bargaining positions in relation to the new enterprise agreement.  Whilst there will be additional reasons for particular conduct to be engaged in during the escalation of the dispute, each step appears to be integrally related to each party’s position in the bargaining process.  Thus, whilst a reason for the proposed proceeding might be to recover loss, I would infer from the limited evidence before me that, on a prima facie basis, the proposed proceeding is another step to assist the position of Yallourn Energy in the bargaining process.” (emphasis added)

28                  This concept appears to be directly reflected in the interlocutory judgment of Marshall J in Construction, Forestry, Mining & Energy Union v Multiplex Constructions (supra):

“27.     A reason for the Supreme Court action, or further proposed Supreme Court action, may well be to recover financial loss but if it is also taken with intent to advance a position in a bargaining process or detract from the position of a party in the bargaining process s 170NC(1) of the Act will be contravened.”

29                  For the sake of completeness, I should say that I derive little assistance on the question of construction from the interlocutory decisions in CFMEU v Master Builders Association of Victoria (No 1) [2000] FCA 168, CFMEU v Mirvac Constructions Pty Ltd (2000) 96 IR 458 ([2000] FCA 341) and Auspine Ltd v CFMEU [2000] FCA 501.

30                  It is clear that if the passages of Merkel J and Marshall J relied upon by the Bank are intended to state the test for breach of s 170NC, then they are far wider than, and inconsistent with, my construction of the section.  Mr Kimber SC, for the Union, submits that they do not represent the considered view of either judge as the proper construction of intent to coerce in s 170NC, but are merely observations in the course of urgent interlocutory proceedings during a far reaching industrial campaign.  He submits that they are to be understood in a context where it was held that there was a prima facie case that most of the industrial action had been protected action.

31                  I agree with Mr Kimber’s submissions.  Neither of their Honours express themselves in a manner which suggests that he was resolving an issue as to the construction of the section, and neither refer to pertinent authority.  This is not surprising in view of the nature of the proceedings.  The fact that the result in these, as well as other, interlocutory decisions might have been different if what I regard as the proper test had been applied is not to the point.

32                  I should also refer again to the decision of Finkelstein J in Finance Sector Union v Commonwealth Bank of Australia (supra), a case between these parties arising out of the very negotiations which are the context for this case.  I have already set out par 44 (see par 18).  His Honour later said (at par 51):

“The question for the bank then was how it could force the union to accept its July offer, remembering that it was of the view that a higher offer was not commercially justified.  The bank needed to find a lever to compel the union to act.  The union was reasonably aggressive in its negotiations, with the support of its members.”

33                  These passages are consistent with my view as to the necessity for compulsion if coercion is to be intended within the section.  His Honour does not, however, refer to the necessity for the means of coercion to be unlawful, illegitimate or unconscionable.  The Bank submits that his Honour must have taken the view that it was unnecessary to so find, because it is  difficult to see how it could be concluded on any basis that offering Australian workplace agreements to workers could be so described without denuding that requirement of all content. Far from being unlawful, illegitimate or unconscionable, the Act encourages the offer of Australian workplace agreements by employers to employees (cf Ryan J in Maritime Union of Australia v Burnie Port Corporation (supra) para 61-72).  Indeed, it is submitted on behalf of the Bank that if the decision of Finkelstein J was correct, it follows that it should succeed on its cross-claims. 

34                  I do not agree.  It would be rare (if ever) that a decision as to whether to grant an interlocutory injunction would be of later precedent value on a substantive issue of law, particularly an issue of law not directly addressed in the decision.  I am not concerned with the correctness or otherwise of the decision.   I appreciate that the result is that the Bank may have the worst of all worlds in relation to the current negotiations, but I cannot let that govern my construction of the statute.  The interlocutory orders restraining the Bank will only be in operation until further order of the Court, and presumably there will be an urgent final hearing to alleviate the unfairness to the Bank which will ensue if it ultimately succeeds.  In any event, as I have said, his Honour did apply an intent to compel test which is consistent with my view of the section. 

35                  I turn to examine proposition (5) put on behalf of the Bank (see par 16).  It is submitted for the Union that this goes well beyond the relevant provisions of the Act, and is, indeed, contrary to the philosophy reflected in the legislation.  It is put that s 170NC(1) is a penalty provision, although s 170NG also authorises the grant of an injunction to prohibit contravention of it.  It does not address the issue of actual consent or authority, which is rather dealt with by sections such as ss 170LR, 170LT(5) (7) and (9), 170LV(3) and (4), 170MC(3), 170MD(3) and (4) and 170MG(3).  It submits that all bargaining tools are available during the bargaining period subject to general lawfulness and any specific prohibition such as s 170NC.  The legislative freedom to take industrial action which would often be intentionally coercive in aid of negotiations (stressed by North J in Australian Paper Ltd v Communication, Electrical, Electronic, Information, Postal, Plumbing & Allied Services Union of Australia (1998) 81 IR 15 at 18, and Merkel J in Yallourn (supra) at par 31) is hardly consistent with the notion of completely pristine negotiations, free of action intended to influence or apply pressure to the other party falling short of coercion in its ordinary meaning.  It is, perhaps, significant that, apart from referring to the passages from Yallourn (above), and Multiplex (above), counsel for the Bank did not offer any definition or explanation of coercion apart from its normal meaning.

36                  I agree with the submissions of the Union.  Division 9 of Part VIB is directed to coercion, and no other topic.  The Union has drawn attention to other definitions of prohibited conduct in other contexts in the Act.  There is simply no basis for reading down the ordinary meaning of “coerce” upon some supposed legislative policy not reflected in the legislation, and not supported by any extrinsic materials.

37                  I return to the Bank’s proposition (1) (see par 16).  It is put for the Union that where the legislature intended that the right of a party to approach the Court is affected, it did so expressly (cf s 166A(1) and s 170MT), and that it would not have been contemplated by the legislature that exercising a statutory right to approach the Court could be “action” with intent to coerce.  Whilst there is substance in the argument, the contrary position is the foundation of the interlocutory decisions to which reference has been made, and I will proceed on the basis that, in this respect, those decisions are correct, leaving the argument to be decided when it is necessary to do so.

38                  Thus, the first question to be answered is whether the Union intended, by bringing these proceedings, to put the Bank in a position where it had no other practical choice open to it but to accept the enterprise bargaining agreement framework as proposed by the Union.  In my opinion, the answer to that question is no.   There is no direct evidence that Mr Riordan, or any other relevant Union official, intended or believed that commencement of the proceedings would compel the Bank to do something it did not wish to do.  I would not be prepared to draw that inference.  To do so would fly in the face of reality.  The Bank is one of Australia’s largest corporations, not likely to be easily coerced. It was contended on behalf of the Bank that the application of the section depends entirely upon the intent of the party accused, not upon either the characteristics of the party sought to be coerced or the chances of success in the intended coercion.  This is correct so far as it goes, but in judging intent by inference it is necessary to consider the likelihood that coercion was intended.  In judging this, in my opinion, the characteristics of the parties to the negotiation are a necessary ingredient.  For example, that which might be likely to coerce a labour subcontractor with two employees might not conceivably coerce a substantial public company.  Correspondingly, an action by a large employer might be likely to coerce a small group of workers, but might not conceivably coerce a powerful union.  In drawing inferences in this case, I work on the basis that Mr Riordan, and the Union, are experienced and rational participants in industrial bargaining, likely to have a sensible appreciation of the realities, and only likely to intend what is reasonably possible.

39                  If the principal proceedings for interpretation are successful, then the Bank has been in the wrong since January 1999, and cannot complain about its own misconduct.  If the proceedings were to fail, then there is no disadvantage other than costs, and payment of the costs of proceedings for interpretation of the award and agreement could not seriously be regarded as a prospect which would overbear the will of the Bank in the sense I have explained.  Mr Riordan was not even cross-examined to seek to make good intent of the relevant kind.  The fact that Mr Riordan may have intended the proceedings to influence, or even induce, the Bank to give ground in the negotiations is far away from an intention to coerce.

40                  If I had concluded that the Union had intended to put the Bank in a position where it had no real choice, it would have then been necessary to go on and decide whether the means intended to be utilised were unlawful or otherwise illegitimate.  Subject to a possible argument as to abuse of process of the Court (to which I shall return), the means are certainly not unlawful.  In my opinion, neither were they illegitimate.  Subject to the proceedings not being an abuse of the process of the Court, it would be a very odd thing if exercising the statutory jurisdiction of the Court to settle a live and genuine dispute were regarded as illegitimate.  I certainly do not think that it was in the present case.

41                  I return to the issue of abuse of process.  If the predominant purpose of bringing proceedings is not to prosecute them to a conclusion, but to use them as a means of obtaining some advantage for which they are not designed or for some collateral advantage beyond what the law offers, then there is an abuse of process (Williams v Spautz (1991-1992) 174 CLR 509 at 526-7)

42                  The findings which I have made as to intent raise the question as to whether an abuse of process is involved.  In my opinion, it is not.  The true interpretation of the award and certified agreements which currently bind the parties was (and is) a relevant issue in the negotiations for a future agreement.  Obtaining the answer of the Court to a live and bona fide dispute between the parties as to that issue for the purpose of the negotiations is not, in my opinion, beyond the purposes of s 413 and s 413A.  The jurisdiction which is invoked is not subject to any such express limitation, and I cannot see any good reason for drawing such an implication.  There is no basis for finding that the applications were made purely as a bluff without any intention of being pursued to a conclusion.  There is a difference between motive and purpose, and between immediate purpose and ultimate purpose (see Williams v Spautz (supra) at 525 and 526).  Here, the immediate purpose of the Union was to use the jurisdiction for the very purpose for which it was designed.  It is also to be noted that Williams v Spautz involved the institution and maintenance of criminal proceedings.

43                  My conclusions make it unnecessary to consider all of the arguments advanced on behalf of the Union – they are recorded in the written and oral submissions.  I should mention one of them, as it is fundamental to the application of s 170NC.  It focuses on the object of the coercion, namely (relevantly for this case):

“… to agree, or not to agree, to:

making … an agreement under Division 2 or 3.”

The essence of the submission is that the section is not directed to the process of bargaining towards the terms of an agreement, or in relation to a particular term which might be included in an agreement, but rather to the giving of consent or approval to the final agreement proposed for certification.  It is not directed to the inevitable horse-trading in the to and fro between the parties in relation to what are often complex agreements.  It is submitted that, in the present case, neither party had actually presented a complete version of an agreement for acceptance.

44                  This construction accords with the natural meaning of the language of the section, and is consistent with ss 170LJ and 170LK (for Division 2) and s 170LR (for Division 3).  Reference is also made to s 170NB and s 170WF(1) to illustrate the legislature distinguishing between negotiations for and the making of an agreement.  Even if correct, of course, cases can be imagined where action taken with intent to coerce during the negotiations might be of such a nature that its influence carries through to the making of the agreement.

45                  The Bank contends that this construction would deprive the section of real effect, because the making of an agreement under coercion would not, in any event, be certified under Division 4.  This is not a satisfactory answer.  The more effective the coercion, the less likely is it that complaint will be made.  Furthermore, s 170NC is a penalty section aimed at deterring coercion from taking place, rather than dealing with the effect of coercion upon a particular agreement.

46                  It may also be relevant to note that Division 2 agreements are made with organisations of employees or, in the case of employees, an employee who is a union member may request a union to represent that person in meetings and conferring with the employer about the agreement, and s 170NC(3) is designed to deter interference with that right.  Division 3 agreements are made with employee organisations.  Both Division 2 and Division 3 agreements are collective.  Persons are not left naked during negotiations.

47                  The question is debatable, and as I do not need to resolve it for present purposes I shall not do so.

48                  The cross-claims will be dismissed, and the applications will proceed to hearing.  The parties have suggested that any order for costs be reserved pending the disposition of the application.

Associate:

Dated:              17 October 2000