FEDERAL COURT OF AUSTRALIA
AWU v BHP Iron-Ore Pty Ltd [2001] FCA 3
AUSTRALIAN WORKERS’ UNION & ORS v BHP IRON-ORE PTY LTD
V 24 of 2000
KENNY J
MELBOURNE
10 JANUARY 2001
SUMMARY OF REASONS FOR JUDGMENT GIVEN ON 10 JANUARY 2001
In accordance with the practice of the Federal Court in certain cases of public interest, I have prepared a brief summary to accompany the reasons for judgment which are to be delivered today. The only authoritative pronouncement of my reasons is that contained in the full reasons for judgment. This summary is necessarily incomplete and deals only with certain aspects of the judgment.
BHP Iron-Ore, the respondent in this case, operates facilities for the extraction and processing of iron ore in the Pilbara region of Western Australia. In November 1999, BHPIO had some 1100 employees at these facilities, aside from staff. Many of these employees were members of the five unions (or their state counterparts) that, together with five individual named employees, are the applicants in this case. The terms and conditions of these workers’ employment were at that time determined primarily by an Award made by the Western Australian Industrial Relations Commission and an Enterprise Bargaining Agreement arrived at through collective bargaining between BHPIO and the unions.
The present case arises out of BHPIO’s offer in November 1999 of workplace agreements to its employees who fell under the award. Workplace agreements, or “WPAs”, are a form of individual contract between employers and employees that, generally speaking, displaces any applicable awards or other collective industrial instruments. BHPIO’s offers were made under the Western Australian Workplace Agreements Act 1993.
The WPAs offered to BHPIO’s employees involved higher wages and other incentives, such as the option to receive a pay-out of accrued sick leave for those employees who signed a WPA. Nearly half of eligible employees signed a WPA in the three months following the offers. Many of these employees in turn resigned from their union. The unions opposed the WPAs and responded by taking industrial action. In these proceedings, the unions contended that the offers violated provisions of the Commonwealth’s Workplace Relations Act 1996 that prohibit, amongst other things:
1) injuring an employee in his or her employment because the employee is a union member;
2) altering the position of an employee to his or her prejudice because the employee is a union member; and
3) inducing an employee to stop being a member of a union.
This involves allegations of breaches of sections 298K, 298L, & 298M of the Commonwealth Act. I reject BHPIO’s submission that these provisions are constitutionally invalid as outside the legislative power of the Parliament.
In essence, the unions’ complaint is that the offer of WPAs reduced the collective bargaining power of those employees who did not sign a WPA by diminishing their ability to take effective collective action. In addition, the offers were said to have led employees to resign from the unions, since union representation was allegedly of little value to a WPA employee. The unions contended that BHPIO senior management knew that union membership would diminish and intended that result as the best way to avoid collective bargaining efforts in the future.
These allegations raise BHPIO management’s reasons for introducing the WPAs as a central issue in this case. Robert Kirkby, then President of the Steel Making and Energy Materials Division of BHP, was ultimately responsible for making the decision. He and several BHPIO senior managers adduced evidence and were extensively cross-examined on this matter. Despite the applicants’ efforts to impugn their testimony, particularly that of Mr Kirkby, I accept that their evidence was in most respects genuine.
This evidence shows that BHPIO senior management began considering WPAs after merger discussions with Hamersley Iron, a competitor that had already introduced WPAs. These negotiations revealed that BHPIO was lagging in terms of efficiency. Many BHPIO executives held the view, rightly or wrongly, that negotiations with the unions had in the past hindered the introduction of necessary workplace changes. The introduction of WPAs was seen as the best way to improve flexibility and efficiency in BHPIO’s operations. A review of the evidence does not show that BHPIO senior management ever considered union membership as such during their deliberations about WPAs. Whilst BHPIO did intend to exclude the unions from the process of implementing workplace changes, the evidence does not support an inference that they offered the WPAs because of employees’ union membership or that they intended that employees stop being union members. It follows that BHPIO has not violated the Workplace Relations Act.
Finally, the applicants claimed that the individual employees’ contracts of employment were breached by BHPIO. I reject this submission, as it based on an erroneous view that the award is incorporated into each employee’s contract of employment.
For the foregoing reasons, I deny the applicants’ claim for injunctive relief. The Court’s role, of course, is limited to a review of the legality of BHPIO’s actions. Accordingly, I can express no view on the desirability or otherwise of workplace agreements, either in the context of this case or as a general policy matter. The full text of this judgment and this summary is available at the Federal Court’s website. (www.fedcourt.gov.au)
