FEDERAL COURT OF AUSTRALIA

Skilled Engineering Limited v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2001] FCA 1397

INDUSTRIAL LAW – whether union can engage in industrial action –injunction to restrain industrial action – form of injunction – “give notice” order – whether order should be made –injunction to restrain strike – whether specific performance of contract of employment

Workplace Relations Act 1996 (Cth) ss 4(8) and 170MN

Australian Paper Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (1988) 81 IR 15 – disapproved

BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining and Energy Union (2000) 102 IR 275 – followed

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v AG Coombs Fire Protection (1998) 87 IR 110 – followed

International Brotherhood of Electrical Workers’ Local Union 2085 v Winnipeg Builders’ Exchange (1968) 65 DLR 2d 242 – followed

Kilpatrick Green Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [1998] FCA 559 – followed

Trade Practices Commission  v Glo Juice Company Pty Ltd (1987) 73 ALR 407 – referred to

SKILLED ENGINEERING LIMITED v AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION

and COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA

V1036 of 2001

FINKELSTEIN J

MELBOURNE

28 SEPTEMBER 2001

REASONS FOR JUDGMENT

1                     There is a provision in the Workplace Relations Act 1996 (Cth) to the effect that between the certification of an agreement under Div 4 Part VIB and its nominal expiry date, employees whose employment is subject to the agreement, organisations of employees who are bound by the agreement, and officers of those organisations, must not “engage in industrial action” that is “for the purpose of supporting or advancing claims against the employer in respect of the employment of employees whose employment is the subject of the agreement”.  The provision is s 170MN.  It makes similar provision for awards.

2                     Skilled Engineering Limited, the applicant, claims that two unions, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, which are bound by a certified agreement that covers Skilled Engineering employees, engaged in industrial action in contravention of s 170MN.  According to the evidence it is likely that the two unions procured employees of Skilled Engineering to go on strike because two employees were to be transferred from one work site to another, and also because there have been problems with the pay slips that are supplied to employees.  When employees refuse to attend work at the direction of their union, that conduct is “industrial action” for the purposes of s 170MN:  see para (d)(i) of the definition of “industrial action” in s 4.  Section 4(8) says that in the Workplace Relations Act “a reference to engaging in conduct includes a reference to being, whether directly or indirectly, a party to or concerned in the conduct”.  The effect of s 4(8) is that if a union has procured workers to go on strike the union will have engaged in industrial action.

3                     Three days ago, on the application of Skilled Engineering, I granted interim relief, restraining the unions from continuing to engage in industrial action.  At the request of Skilled Engineering I also made an order requiring the AMWU to use its best endeavours to bring the terms of the restraining order to the notice of the employees of Skilled Engineering. 

4                     During the course of the hearing I queried whether it was desirable to make a “give notice” order.  I was concerned that the workers on strike may not understand the precise scope of the restraining order.  In particular I thought that some workers might believe the order had an effect which was wider than its actual effect.  Regrettably, I was persuaded to make the order, largely because similar orders have been made previously by other judges.  As events have turned out, I am now satisfied that I should not have made the order, at least not without qualification.  I will explain what I mean after I have exposed the problem.  To comply with the order, the AMWU had one of its organisers, Mr Robb, attend a meeting of the union’s members to inform them that a temporary restraining order had been made against the union.  Mr Robb told the workers that as a result of the order all industrial action had to stop and the workers were required to return to their normal duties.  Mr Robb was asked whether the workers might be personally liable for breach of the court order, if they did not comply with it.  Mr Robb said that he did not understand that to be the case because the order was directed against the union, but he said that there should be a return to work. 

5                     Of course Mr Robb was wrong in his statement that the order required all industrial action to cease, if he meant by that, as he plainly did, that the workers had been ordered to return to work.  Mr Robb cannot be blamed for the mistake.  It does not surprise me that someone in Mr Robb’s position, or in the position of the workers on strike, might not understand the true effect of the restraining order. 

6                     As a general rule there will be few cases where it is necessary to make a “give notice” order in relation to persons who are not parties to the litigation.  I accept that there may be some occasions when it might be necessary to make such an order, though those occasions are not likely to arise very often.  When they occur, provided one can be satisfied that there is no likelihood of confusion about the effect of the restraining order (that is, if it is clear precisely what must be done or not done to comply with it), a “give notice” order may be made without qualification.  However, if there be any risk of misunderstanding, the restraining order should be accompanied by a written explanation of its effect.  That explanation should be approved by the court.

7                     I can now turn to the issue that is presently before the court.  The restraining order that I made three days ago was in the following terms:

“[T]he Respondents be restrained (whether by their officers, delegates, employees, agents or howsoever otherwise) from further directing, organising, inducing, encouraging, authorising or procuring any employee of the Applicant at Godfrey Hirst Australia and Barwon Spinners, 7 Factories Road, Geelong South and Riverside Textiles Pty Ltd, 22 Corio Quay Road, North Geelong to stop work or fail to work other than in accordance with the Godfrey Hirst Australia and Riverside Textiles Maintenance Enterprise Agreement 2000 - 2003:

(a)       for the reason that two employees namely Terry Ruck and Terry Hotchins were directed to carry out their duties from the premises of the Skilled Geelong Workshop at Factory 1, Fitzroy Square, North Geelong instead of the premises at Godfrey Hirst Australia, 7 Factories Road, Geelong South; or

(b)       for the reason that there is or maybe some deficiency or irregularity in the pay slip provided to the Applicant's employees.”

I should mention that Skilled Engineering sought a restraining order in the following terms: 

“[T]he Respondents be restrained (whether by their officers, delegates, employees, agents or howsoever otherwise) from directing, organising, inducing, encouraging, authorising or procuring any employee of the Applicant at Godfrey Hirst Australia and Barwon Spinners, 7 Factories Road, Geelong South, Victoria to stop work or fail to work other than in accordance with the Godfrey Hirst Australia and Riverside Textiles Maintenance Enterprise Agreement 2000 – 2003 for purposes that include the purpose of supporting or advancing claims against the Applicant that all employees employed subject to the Agreement can only be employed at the Godfrey Hirst site and not at any other Skilled site, or claims against the Applicant relating to payroll.”

8                     Mr Parry explained that to restrain a contravention of s 170MN, orders commonly follow this form.  I am of opinion, however, that the order sought was too wide and designed to “train the heavy guns of the law upon the respondent[s]” (Trade Practices Commission  v Glo Juice Company Pty Ltd (1987) 73 ALR 407, 418), without giving them adequate guidance.  Thus I narrowed the form of the order from that which had been proposed.  The order operates until today.  Now the first thing that Skilled Engineering seeks is a continuation of the injunction until the trial.  That course is opposed by the unions.  They put forward three separate grounds why no orders should be made.  It is convenient to come directly to those grounds. 

9                     First, it is not conceded that a union can “engage” in industrial action for the purposes of s 170MN.  Shortly stated, the argument is that the only action which can be “industrial action” as defined, is that taken by employees.  I need not set out the definition of industrial action from whence this argument is derived.  It is sufficient to say that if attention is directed to that definition alone, the argument may be correct.  Indeed it was accepted as correct in Australian Paper Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (1988) 81 IR 15. 

10                  However, s 170MN makes it unlawful for a person to “engage in industrial action”, and I have already drawn attention to s 4(8) where “engaging in conduct” is defined, and explained its effect.  The decision in Australian Paper Ltd does not pay regard to s 4(8).  If it had, it is likely that a different result would have been reached.  For my own part I think that the case was wrongly decided.  See also: Kilpatrick Green Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [1998] FCA 559 at p.11; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v AG Coombs Fire Protection (1998) 87 IR 110, 113; BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining and Energy Union (2000) 102 IR 275, 290.

11                  The second point is that there is not sufficient evidence to permit a finding, even on a prima facie basis, that the unions procured the workers to go on strike.  It is true, as the unions say, that there is no direct evidence that they urged the workers to strike.  Nevertheless an inference to that effect may be drawn from the evidence.  Union organisers have been involved in discussions with Skilled Engineering management about the two issues of concern which caused the workers to walk off the site.  The organisers’ involvement suggests that they had a role to play in organising the strike.   I also note that while affidavits were filed on behalf of the unions, the deponents did not deny that the unions were concerned in the strike.  This omission makes it easier to draw the inference.

12                  The third point raises an interesting issue.  Although the striking workers were told to return to work, they informed the union organisers that they would remain on strike until Monday morning.  (To appreciate the significance of this I interpolate to say that today is Friday and the company operates seven days a week, twenty-four hours a day, except on weekends when it seems that fewer hours are worked). 

13                  The unions say that the power to grant an injunction to restrain a contravention of s 170MN should only be exercised when the evidence shows that there is a risk a party will contravene the section.  That proposition may be accepted.  Then the unions go on to say that the evidence does not admit of the conclusion that such a risk presently exists.  To quote from the unions’ submissions:  “[W]hatever the [respondents] may have arguably done by way of a contravention of s 170MN, [that] was remedied on 26 September 2001”.  This proposition is more doubtful.  It may be that the available evidence points towards the conclusion that the unions have decided to embark upon a more moderate course.  On the other hand, the risk that they may take further action has not dissipated and the harm that will be caused if the strike is to continue should not be underestimated, so caution suggests that an order should be made.

14                  The unions also address the balance of convenience.  They say that no purpose would be served in continuing the interim relief, because it would have no relevant effect as the employees intend to remain on strike until Monday and that position will not be overcome by any order I may make against the unions.

15                  This is an argument that I do find persuasive, but not for the reason given by the unions.  I accept the proposition that if I continue the restraining order, that will not bring the striking workers back to work.  I also accept that, if possible, an order should be made that would require the workers to resume work.  This brings me to the second group of orders that are sought by Skilled Engineering.  First, they seek to add the striking workers as respondents, and then they ask for an order that the workers end their strike. 

16                  To permit the making of those orders Skilled Engineering has served on the striking workers a letter advising them that application will be made this day to join them as respondents to the proceeding and to enjoin them from continuing with the strike.  Draft court documents were also served.  Notwithstanding the service of these documents, none of the striking workers has appeared to resist the orders sought.

17                  Here it is necessary to note the traditional reluctance to grant specific performance of contracts of personal service, and to do so indirectly by injunction.  One reason for this reluctance is that the continuation of a contract of employment often entails the continuation of a personal relationship of a type which usually requires the cooperation of both parties.  Equity would not require one party to perform his obligations, leaving that party only a remedy in damages if the contract was breached by the other party.  Nor would it make orders which require supervision.  Thus it is easy to find many cases where the court has refused to order specific performance, or grant an injunction the practical effect of which is to give specific performance, of a contract of employment.  In Australia one of the best known is J C Williamson Limited v Lukey and Mulholland (1931) 45 CLR 282.

18                  But the law has changed.  One of the clearest expositions of the current rule as it applies to circumstances that are presently under consideration is to be found in International Brotherhood of Electrical Workers’ Local Union 2085 v Winnipeg Builders’ Exchange (1968) 65 DLR 2d 242, a decision of the Supreme Court of Canada.  There employees had engaged in a strike which was forbidden by a Provincial Labour Relations Act.  The Manitoba Court of Queens Bench granted an interlocutory injunction to restrain the strike.  The Supreme Court of Canada upheld the injunction prohibiting the strike which was “engaged in direct violation of the terms of a collective agreement binding on the striking employees and in breach of the express provisions of the [Provincial Labour Relations] Act”:  65 DLR 2d at 251.  In dealing with the question whether labour agreements should be specifically enforced, Cartwright CJC, who delivered the judgment of the court, said at 251:

“There is a real difference between saying to one individual that he must go on working for another individual and saying to a group bound by a collective agreement that they must not take concerted action to break this contract and to disobey the statute law of the Province … to hold otherwise would be to render illusory the protection afforded to the parties by a collective agreement and by the statute.”

19                  That is precisely the position we are now in.  The collective agreement prohibits strikes during the period of the agreement’s nominal operation.  So does the statute.  Indeed the statute proceeds upon the not unreasonable assumption that when parties have resolved an industrial dispute by a collective agreement or by an award, they should not resort to industrial action, at least until the agreement or award has run its course. 

20                  Accordingly, I propose to make an order adding the striking workers as respondents and a further order restraining their continuation of the strike.  It is for that reason that no purpose would be served in continuing the injunction against the unions.  If an injunction would have no purpose, it should not be made.

Associate:

Dated:              3 October 2001