FEDERAL COURT OF AUSTRALIA
Schanka v Employment National (Administration) Pty Limited [2001] FCA 1623
INDUSTRIAL LAW – Australian Workplace Agreement (“AWA”) – duress – power to declare void an AWA – penalty – number of contraventions
STATUTORY INTERPRETATION – extrinsic material – amendments to Workplace Relations and Other Legislation Amendment Bill 1996 (Cth) in Senate – “agreement” between Commonwealth Government and Australian Democrats on Bill
PRACTICE AND PROCEDURE – representative proceeding – notice to group members – whether a notice should issue informing group members of the publication of reasons for judgment and inviting submissions on the further conduct of the representative proceeding
Zhang v Minister for Immigration, Local Government & Ethnic Affairs (1993) 45 FCR 384 referred to
Wong v Silkfield Pty Ltd (1999) 199 CLR 255 referred to
Johnson Tiles Pty Ltd v Esso Australia Limited [1999] FCA 56 referred to
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 referred to
Josephson v Walker (1918) 18 CLR 691 referred to
Barwick v Law Society of New South Wales (2000) 169 ALR 236 referred to
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 referred to
Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150
Community & Public Sector Union v Telstra Corporation Limited [2001] FCA 1364 referred to
PETER SCHANKA, ERICA ALDRIDGE, RICHARD WALDEN AND JAMES BURNS v EMPLOYMENT NATIONAL (ADMINISTRATION) PTY LIMITED (ACN 080 046 411)
NG 461 OF 1998
MOORE J
15 NOVEMBER 2001
SYDNEY
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IN THE FEDERAL COURT OF AUSTRALIA |
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BETWEEN: |
PETER SCHANKA FIRST APPLICANT
ERICA ALDRIDGE SECOND APPLICANT
RICHARD WALDEN THIRD APPLICANT
JAMES BURNS FOURTH APPLICANT
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AND: |
EMPLOYMENT NATIONAL (ADMINISTRATION) PTY LIMITED (ACN 080 046 411) RESPONDENT
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DATE OF ORDER: |
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WHERE MADE: |
THE COURT ORDERS AND DECLARES THAT:
1. A penalty of $2,500 be imposed on Employment National (Administration) Pty Ltd for breaching s 170WG(1) of the Workplace Relations Act 1996 (Cth) by applying duress to Peter Schanka.
2. A penalty of $2,500 be imposed on Employment National (Administration) Pty Ltd for breaching s 170WG(1) of the Workplace Relations Act 1996 (Cth) by applying duress to Richard Walden.
3. A penalty of $2,500 be imposed on Employment National (Administration) Pty Ltd for breaching s 170WG(1) of the Workplace Relations Act 1996 (Cth) by applying duress to Valinda Brushe.
4. A penalty of $2,500 be imposed on Employment National (Administration) Pty Ltd for breaching s 170WG(1) of the Workplace Relations Act 1996 (Cth) by applying duress to James Burns.
5. Within 28 days, Employment National (Administration) Pty Limited pay to the Community and Public Sector Union the penalties totalling $10,000.
6. The proceeding be otherwise dismissed.
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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BETWEEN: |
FIRST APPLICANT
ERICA ALDRIDGE SECOND APPLICANT
RICHARD WALDEN THIRD APPLICANT
JAMES BURNS FOURTH APPLICANT
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AND: |
EMPLOYMENT NATIONAL (ADMINISTRATION) PTY LIMITED (ACN 080 046 411) RESPONDENT
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JUDGE: |
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DATE: |
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PLACE: |
REASONS FOR JUDGMENT
Introduction
1 This is a representative proceeding brought under Pt IVA of the Federal Court of Australia Act 1976 (Cth) (“FCA Act”) by Peter Schanka, Erica Aldridge, Richard Walden and James Burns (“the applicants”). On 18 May 2001, I decided that Employment National (Administration) Pty Ltd (“ENA”) contravened s 170WG(1) of the Workplace Relations Act 1996 (Cth) (“WR Act”) by applying duress to Schanka, Walden, Burns and one group member, Valinda Brushe, but not Aldridge, in connection with an Australian Workplace Agreement (“AWA”): [2001] FCA 579. However the evidence led by the applicants did not establish that duress was applied to the other group members. The matter was adjourned to enable the parties to make submissions on the appropriate orders. That led to lengthy submissions about how the matter should be concluded.
2 The following issues remain to be resolved. First, what orders should be made about the further conduct of the representative proceeding in relation to the other group members. Secondly, what orders should be made concerning the AWAs entered into by Schanka, Walden and Brushe. And thirdly, whether a penalty should be imposed on ENA for contravention of s 170WG(1) and, if so, in what amount and to whom should that penalty be paid.
The further conduct of the representative proceeding in relation to the other group members
“Several of the matters that point to the application of duress to Brushe, Walden, Schanka and Burns are not directly addressed in the evidence as they may have arisen in relation to the other members of the group presently under discussion. That is, the evidence does not directly address what the individual position was in relation to all other employees who took up employment with ENA (or, indeed, were simply offered employment with ENA). For example, it is not apparent whether all other members of the group were being offered the same or substantially the same position they held prior to 1 May 1998 as a member of the APS. While it may be that all the employees in the APS wanting to take up employment with ENA, or at least very many of them, were being offered, in substance, the positions they held in the CES immediately before 1 May 1998. However I cannot infer, as I was invited by the applicants to do, that as a matter of fact this was so of each and every member of the group on whose behalf these proceedings are brought. These are proceedings for a penalty and it is thus appropriate to apply the Briginshaw standard of proof […] and the evidence in this matter falls short of establishing, to that standard, that each and every member of the group was being offered the position they held before 1 May 1998. […]
Nor does the evidence address directly whether any other employee who had not signed an AWA by 20 April 1998 had made known to ENA that he or she did not want to be employed under the terms and conditions embodied in the proposed AWA, did not want the prescription of those terms by an AWA or both. While an inference might be drawn from the evidence as a whole that there were employees in addition to Brushe, Walden, Schanka and Burns whose position was the same, their identities and precise number is unknown. This is an important matter as these are representative proceedings in which the applicants seek the imposition of penalties on the footing that ENA applied duress to each member of the group. Moreover the applicants ultimately sought a declaratory order that ENA had applied duress to each and every member of the group. In my opinion, the question of whether duress was applied as alleged turns fundamentally on the question of whether ENA, in conducting itself in the way it did, was requiring each member of the group to sign an AWA when it knew that the individual wanted to negotiate or bargain about the terms and conditions contained in the standard AWA or about whether the terms and conditions of his or her employment should be prescribed by an AWA. Or, at the least, it was known to ENA this was the likely position. In the absence of evidence that would support a finding that any particular individual wanted to negotiate or bargain about these matters, (or it was likely the individual wanted to), it cannot be said, in my opinion, that the conduct of ENA did, or probably would, deny or tend to deny the individual the opportunity to negotiate or bargain freely. One is left not knowing whether the conduct of ENA involved the application of duress nor knowing whether the pressure was being applied to an individual who wanted to negotiate or bargain.
This can be illustrated by the position of Ashfield about which there is some evidence. He is a member of the group on whose behalf these proceedings are brought. He gave evidence that he willingly signed an AWA. It is plain he did not wish to negotiate or bargain with ENA about the terms and conditions of employment in the AWA nor to negotiate or bargain with ENA about whether an AWA should be the means of prescribing those terms and conditions. In the absence of evidence of an expressed desire to negotiate or bargain on one or both of these matters (or even an unstated desire to be inferred from the circumstances) or evidence that this was likely to be the position, it cannot be said, in my opinion, that ENA applied duress to him. No question of negotiation or bargaining, whether free or illusory, arose. I do not accept that the imposition of the April 1998 condition, viewed in isolation and without regard to the circumstances of each of the individuals on whom the imposition of the condition might operate, was conduct intended to be proscribed by s 170WG having regard to what I view as the purpose of the section discussed earlier.
For these reasons, the evidence only establishes that in the period after 20 April 1998 ENA applied duress to Brushe, Walden, Schanka and Burns and not other members of the group. The absence of evidence about the circumstances of any particular individual for the period prior to 20 April 1998 would lead to a similar conclusion. That is, the evidence does not establish that in this earlier period duress was applied to any person in the group.”
4 Following the publication of these reasons, the applicants initially foreshadowed an application for orders under s 33N (that the proceeding no longer continue as a representative proceeding) or s 33Q (that the issue of whether duress was applied to other group members be determined separately) of the FCA Act. Ultimately, however, the applicants sought only an order that a notice be sent to group members under s 33X(5) of the FCA Act. The applicants proposed that the notice inform the other group members of the reasons for judgment of 18 May 2001 and invite them to make submissions about the further conduct of the representative proceeding before orders were made relating to the named applicants. The applicants also proposed that the notice inform the group members that an application might be made under s 33N of the FCA Act for an order that this proceeding no longer continue as a representative proceeding. In a final written submission following the hearing on this issue, the applicants appeared to make such an application as an alternative to the issuing of a notice.
5 ENA submitted that orders should be made concerning the named applicants and Brushe, and an order made otherwise dismissing the proceeding.
6 The applicants’ submissions in support of the issuing of a notice were, in summary, as follows. This proceeding was properly commenced as a representative proceeding under Pt IVA on behalf of a group which numbered several hundred employees. It would have been impractical and contrary to the purpose of Pt IVA to present evidence, at the outset, of the individual circumstances of every group member. It only became apparent from the reasons of 18 May 2001 that such evidence was necessary to establish a contravention of s 170WG in the circumstances of this case. It is important to consider the impact of the judgment on the group members whose substantive rights will be bound by it: Jenkins v NZI Securities Limited (1994) 52 FCR 572 at 577. If the Court were to make orders now concerning only the named applicants, they would bind all group members other than those who have opted out: s 33ZB of the FCA Act. If other group members sought to pursue separately claims based on their individual circumstances, they may be subject to res judicata or issue estoppel. So as not to prejudice such claims, the Court should now allow the other group members an opportunity to be heard, in accordance with the principle articulated by French J in Zhang v Minister for Immigration, Local Government & Ethnic Affairs (1993) 45 FCR 384 at 405:
“In a case in which the group members have not raised individual claims but have been defined into the group on their related circumstances and the common issue, it is necessary that care be taken to ensure that claims based on individual circumstances of which the Court knows nothing are not prejudiced.”
7 The submissions of ENA against the issuing of a notice were, in summary, as follows. The applicants elected to run their case on the basis that a contravention of s 170WG(1) could be established by focusing on the conduct of ENA, though they did lead some evidence of the individual circumstances of the named applicants and one group member, Brushe. The applicants made this election in full knowledge that ENA submitted it was necessary to look at individual circumstances, and that was an issue to be determined in the proceeding. Having conducted their case on that basis, the applicants were only successful in relation to those individuals about whom specific evidence had been led. The present application to issue a notice (to be followed perhaps with an application for an order under s 33N or s 33Q) is, in substance, an application to re-open the case. Such an application ought be determined in accordance with the principles stated by the High Court in such cases as State Rail Authority of New South Wales v Codelfa Construction Pty Ltd (1982) 150 CLR 29, Wentworth v Woollahra Municipal Council (1982) 149 CLR 672, Smith v New South Wales Bar Association (1992) 176 CLR 256 and Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300. On these authorities, it was said, no basis existed for allowing the applicants to re-open their case. Moreover, the weight of discretionary considerations was against the course proposed by the applicants.
8 I have concluded that it is inappropriate to order that a notice be issued, and that the appropriate order is that the proceeding be otherwise dismissed.
9 Having regard to the history of the proceeding, it cannot be said that before the publication of my reasons on 18 May 2001 it would not have been apparent to the applicants that evidence of individual circumstances might be necessary. The following (referred to by counsel for ENA) illustrate that this general issue was raised on several occasions.
10 Earlier in the proceeding an application was made by ENA under s 33N for an order that the proceeding cease to be a representative proceeding. I refused to make such an order and said ((1998) 86 IR 283 at 294):
“…[It] can be assumed that in considering whether there has been contravention of s 170WG it will at least be necessary to consider the possible or probable impact of the conduct of ENA on individuals who signed AWAs and, arguably, those who were invited to sign them. It may also involve a consideration of the individual circumstances of each employee and, arguably, a consideration of the subjective reaction to the conduct of ENA on a given individual and the contribution, if any, it made to the signing of the AWA if they signed them. I put it this way because it may ultimately be necessary for the circumstances of individuals to be considered separately.
However, the scheme in Pt IVA of the FC Act provides a mechanism where, by order of the Court, the proceedings cease to be representative proceedings and become proceedings in which the circumstances of individual applicants are considered in separate proceedings. … In my view it is appropriate for the present proceeding to continue for the time being as a representative proceeding. That is, at least until a point is reached where it is apparent that it will be necessary to examine the subjective reaction of any person who signed an AWA and their circumstances in order to ascertain whether there has been a contravention of s 170WG.”
11 On the first day of the hearing of this matter (27 November 2000), senior counsel for ENA raised, as a procedural question, the scope of the issues to be determined in the hearing (at p 33):
“[SENIOR COUNSEL FOR ENA]: … One of the procedural things that has to be sorted out is, what’s the trial about at the moment? This is a representative proceeding, so is this about common questions of fact or law? So that’s got to be sorted out.
[THE COURT]: Well I must say, I didn’t apprehend from anything I’ve been told before five seconds ago, that there was any residual issues about the nature of the proceedings, they’re representative proceedings, I rather thought that there wasn’t any controversy attending the prosecution.
[SENIOR COUNSEL FOR ENA]: There have been no directions made or sought about how they’re to be conducted, because clearly, many of the affidavits, particularly the individual deponents, don’t go to common issues of fact or law, they go to individual circumstances. So at some stage, the common questions of fact or law have got to be severed from the individual complaints, and that will need to be sorted out.
[THE COURT]: That may or may not be correct, Mr Trew, but I would have thought, indeed expected, that those sort of issues would have been raised some time ago, if there was a concern on anyone’s part, your side or the applicant’s side, that the course the proceedings was taking needed to be further refined, in regard to their representative character.
[SENIOR COUNSEL FOR ENA]: Well nobody has told us your Honour, just exactly how the applicants, if it’s got the carriage of the case, how it proposes to deal with those matters, and they need to be sorted out, and there’s an obligation on the court to determine, irrespective of the position of the parties, at what particular time, or circumstances, that’s the end of the common questions of fact or law …”
12 At directions hearing on 30 November 2000, I raised with junior counsel for ENA the matter raised by senior counsel on 27 November 2000 about the scope of the hearing (at p 3):
“[JUNIOR COUNSEL FOR ENA]: … our friends brought the case on the basis that: you merely look at our conduct and you don’t have regard to any individual circumstances, we are at issue on that and if it becomes necessary to look at individual circumstances after making findings of common fact and law, then, it may be necessary to make orders under s 33N.
[THE COURT]: But this is where I think with respect there may be confusion. If I am dealing with a question of liability, that is: has there, or has there not been a contravention of section 170WG, is it?
[JUNIOR COUNSEL FOR ENA]: Yes, it is.
[THE COURT]: And there is evidence before me that relates to the circumstances of a limited number of people, and I find it is necessary to pay regard to the circumstances of individuals in relation to such matters.
[JUNIOR COUNSEL FOR ENA]: Yes.
[THE COURT]: It may be that the ultimate outcome would be, if I were to find that the circumstances in relation to the individuals demonstrated a breach, but there was no evidence in relation to the remainder of the members of the group, then, there wouldn’t be a finding of contravention in relation to the remainder of the members of the group. If on the other hand I don’t accept that you need to prove individual circumstances well, presumably, in theory there could be a finding of contravention in relation to both the applicants and all the members of the group.
[JUNIOR COUNSEL FOR ENA]: Yes.
[THE COURT]: So in a sense the applicants are taking the risk. In fact, this fairly represents the evidence and I have not absorbed it all, that it is not necessary to prove the circumstances of individuals, because they haven’t sought to do so. If it is, well, perhaps they will run into the sort of problems I have just discussed but, at the end of the day, what I will be deciding at the conclusion of the hearing commencing on 29 January, as I understand this to be common ground: has the respondent contravened the section in relation to both the applicants and the members of the group, is that right?
[JUNIOR COUNSEL FOR ENA]: That is the question that your Honour will be asked to decide. Your Honour, may as you have indicated, so that you can find in respect of the applicants because their circumstances have come before you and you are unable to find it in respect of the remainder of the group, that may be one result, yes.
[THE COURT]: But then what I would be doing would be moving on to consider the question of penalty in relation to those in respect of whom I have found there is a contravention. I mean, it is not as though I would then go on – I am sure it is not in your client’s interest for me to then go on and consider the circumstances of other members of the group if they haven’t been put before me at this stage.
[JUNIOR COUNSEL FOR ENA]: Yes. I would have thought not, your Honour.
[THE COURT]: No, so I think I understand what I am doing, as long as you agree with me I am content to proceed on that basis.
[JUNIOR COUNSEL FOR ENA]: I think we do too. Yes, thank you.
[SENIOR COUNSEL FOR THE APPLICANTS]: We agree, your Honour.”
13 Finally, at the hearing on 2 February 2001, during an exchange with senior counsel for ENA on the question of whether there might be one or a number of contraventions, the following was said:
“[THE COURT]: But I rather think the applicants have taken the position with the attendant risks that flow from it that it’s only necessary to look at the conduct of the company and if they fail in that fundamental proposition …
[SENIOR COUNSEL FOR ENA]: That’s right your Honour and that raises the question, if you only look at the conduct of the company there is only one offence.
[THE COURT]: That may be right but all I am saying that I can’t, can I, dictate to the applicant how they conduct their case if they’ve elected to follow a particular course and they are inviting me to make declarations of what I might describe as general application in relation to all members of the group on a particular basis their application fails or succeeds.”
14 It was submitted by senior counsel for the applicants that in interlocutory decisions in this proceeding it was made clear that a contravention of s 170WG(1) can be established without analysing the actual effect of ENA’s conduct on group members (though its likely effect is relevant). Particular reliance is placed on two passages. In a judgment on 24 September 1999, I said ((1999) 166 ALR 663 at [42]-[43]):
“In my opinion s 170WG(1), properly construed, applies to the conduct of a person applying duress irrespective of whether that conduct actually results in the making of an AWA and irrespective of whether, as a matter of fact, the party subjected to that conduct did not freely make the AWA if one was made.
That is not to say that, in ascertaining whether conduct contravened s 170WG(1), the potential effect of the conduct on the exercise of free will by the person to whom it is applied is irrelevant. It plainly is in this way. The conduct of the contravening party must involve illegitimate pressure. […] [It] must be pressure that is likely to have the effect of denying the exercise of free will if an AWA was made …”
In an appeal from that judgment, the Full Court said ((2000) 97 FCR 186 at 193):
“… the legislature’s concentration on the quality of the conduct and intention of the person against whom duress is alleged is also borne out by the fact that the proscription in s 170WG(1) is cast in the form “a person must not apply duress”.”
The judgments were given to determine preliminary questions. While one question was initially formulated as “on the proper interpretation of s 170WG(1) … is duress in that section limited to the conduct of the alleged perpetrator?” it was subsequently reformulated. The questions became:
“Can a person, by their conduct, contravene s 170WG(1):
(i) before an AWA is made by the person to whom the conduct was directed;
(ii) irrespective of whether an AWA is made by a person to whom the conduct was directed;
(iii) if an AWA is not made by a person to whom the conduct was directed.”
15 The comments in the passages set out above formed a link in the chain of reasoning that led to affirmative answers to each of these questions. They did not establish a principle of law that evidence of individual circumstances is irrelevant in ascertaining whether conduct amounts to duress under s 170WG(1).
16 I am conscious that one of the purposes of Pt IVA is to enable the pursuit and efficient resolution of a claim on behalf of a group, where it may not be economically viable for group members to pursue the claim individually: see Wong v Silkfield Pty Ltd (1999) 199 CLR 255 at [20]. Accordingly, it is important not to take an overly legalistic approach to Pt IVA: Johnson Tiles Pty Ltd v Esso Australia Limited [1999] FCA 56 at [49]. However, it was for the applicants to decide how claims were to be divided into common and individual issues and pursued in the Court. In the event, they elected to treat the entire question of duress as a common issue and to resist any submission that in order to determine the issue of duress it was necessary to present evidence of all group members’ individual circumstances. In addition, I do not accept, as I discuss later, that I have power to make an order avoiding an AWA. That would be the principal remedy which would or might be of personal benefit to other members of the group. If I had concluded the Court had that power, then that would have been a consideration pointing towards the resolution of this matter in a way that preserved the rights of individual group members to seek to have their AWAs set aside, if that was a course they wished to follow. In the absence of such a power, the only purpose served by not dismissing the application is to leave open the possibility of the applicants or individuals seeking penalties against ENA for contravening s 170WG. This, in my opinion, having regard to the history of the matter, provides an insufficient basis for not following the course proposed by ENA for the reasons it advanced.
17 Accordingly, it is inappropriate that a notice be sent to group members under s 33X(5) or an order be made under s 33N. The applicants made no application to re-open their case. It is unnecessary to consider whether the applicants should be allowed to do so. The appropriate order, in my opinion, concerning the group members in relation to whom a contravention of s 170WG(1) has not been established is that the proceeding be otherwise dismissed.
The AWAs entered into by Schanka, Walden and Brushe
18 In my reasons for judgment published on 18 May 2001, I concluded that ENA had applied duress to Schanka, Walden, Burns and Brushe in contravention of s 170WG(1). Schanka, Walden and Brushe entered AWAs. The applicants sought a declaration that their AWAs were void ab initio. ENA submitted that the Court has no power to make such a declaration, and that even if there is such a power, as a matter of discretion I should not exercise it.
19 The applicants submitted that s 23 of the FCA Act confers power on the Court to make such a declaration. That section relevantly provides:
“23. The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.”
“Once the jurisdiction conferred on the Federal Court by the [WR Act] is invoked, that Court has power under s 23 of the [FCA Act] to make ‘orders of such kinds, including interlocutory orders … as the Court thinks appropriate’. That power may be exercised in any proceeding in which the Federal Court has jurisdiction unless the jurisdiction invoked is conferred in terms which expressly or impliedly deny the s 23 power to the Court in that class of proceeding. It cannot be invoked to grant an injunction where the Court acquires its jurisdiction under a statute which provides an exhaustive code of the available remedies and that code does not authorise the grant of an injunction.”
21 The WR Act, it was submitted, does not expressly or impliedly deny the power in s 23 to the Court in a proceeding alleging a contravention of s 170WG(1) of that Act. The WR Act does not provide an exhaustive code of available remedies following a contravention of s 170WG(1). While the legislature did not confer an express power on the Court to avoid an AWA, it cannot be taken to have intended that persons who are subjected to duress in connection with an AWA remain bound by the AWA. It would be an absurd consequence if an AWA could not be avoided by the Court following a finding that entry into the AWA had been procured by duress.
22 ENA took issue with this analysis. ENA submitted that the WR Act does provide a code of available remedies following a contravention of s 170WG(1). The FCA Act does not confer power to make the declaration sought by the applicants.
23 In construing the WR Act, the Court should pay regard, it was submitted, to the history of the Workplace Relations and Other Legislation Amendment Bill 1996 (Cth) (“the Bill”) in the Parliament. This Bill is the source of Pt VID of the WR Act which governs AWAs. When first introduced to Parliament, the Bill conferred on the Court powers to award damages for breach of an AWA (cl 170VW), to award damages to a person who suffered loss or damage as a result of having made an AWA under duress (cl 170VX) and to set aside or vary an AWA made under duress (cl 170VY). The Bill initially provided for the filing of an AWA with the Employment Advocate (cll 170VN to 170VP) but not for its approval by the Employment Advocate. The Bill, in this form, was passed by the House of Representatives.
“Approval process
3.2 AWAs will be required to be lodged for approval with and vetting by the Employment Advocate (EA).
3.3 To approve the AWA … the EA would need to be in no doubt that the proposed agreement was no less favourable to the employee(s) concerned …
…
3.7 The EA will also need to be satisfied that:
· …
· …
· the employee(s) genuinely consented to the agreement.
3.8 The EA could contact the parties if he or she considered this necessary and/or arrange a meeting with the parties or their agents to discuss relevant facts. However, there would be no right of intervention by any other third party.
…
3.11 If the EA forms the view that the proposed agreement is less favourable and neither amending the agreement nor giving an undertaking about its operation is practicable, the EA will refer the matter to the AIRC, for the application of the public interest test ...
…
3.13 In applying the public interest test, the AIRC could meet with the parties in camera but there would be no right of intervention by any third party. The AIRC will also be able to consult the EA (for example, on whether there had been ‘genuine agreement’). [I interpolate that the words in parentheses are the only time the “agreement” expressly refers to the consideration by the Australian Industrial Relations Commission (“the Commission”) of whether there has been “genuine agreement” to an AWA.]
…
3.16 Since agreements would be vetted ‘up front’ there will no longer be a need for a court to be able to set aside or vary an AWA made under duress.”
(Emphasis added.)
25 The Bill was amended in the Senate. Clause 170VY was omitted. Clause 170VX was replaced by a provision enabling an employee to recover from an employer in a court any shortfall between entitlements under an AWA and entitlements under an award (or the AWA after an undertaking by the employer has been included). New provisions were introduced governing the approval of an AWA by the Employment Advocate. Clause 170VPB(4) required the Employment Advocate to refuse to approve an AWA if not satisfied that the AWA met the “additional approval requirements”. The “additional approval requirements” included, in cl 170VPA(1)(d), that “the employee genuinely consented to making the AWA”. No express provision was made for the referral to or consideration by the Commission of whether an employee has “genuinely consented” to the AWA. These amendments ultimately formed part of the amending legislation passed by Parliament. I should note that ENA also referred to an explanatory memorandum and a supplementary explanatory memorandum (which followed the above amendments to the Bill) but they, in substance, simply describe what are the contents of the relevant provisions of the Bill.
26 ENA submitted that this history of the Bill demonstrated the existence of a clear legislative intention to specify exhaustively the remedies available for breach of s 170WG(1) and an intention to deny the Court the power to avoid or set aside an AWA. The available remedies are a penalty (s 170VV) and an injunction (s 170VZ). In accordance with the principle stated by the High Court in Patrick Stevedores v MUA (see [20]), s 23 of the FCA Act does not confer power on the Court to declare the AWAs void.
“Prima facie, where the same Statute creates a new right and specifies the remedy, that remedy is exclusive. The natural presumption to begin with is that Parliament in creating the novel right attaches to it the particular mode of enforcement as part of its statutory scheme. To that extent the enactment is a code.”
“[Section 178] is an example of a special statutory mode of enforcement … of the special statutory species of agreement, created by the legislation and conferring new rights, known as a certified agreement.”
His Honour also referred (at 438-439) to a number of earlier cases concerning the enforcement of awards under the Conciliation and Arbitration Act 1904 (Cth) and the Industrial Relations Act 1988 (Cth) and had concluded that Parliament had intended to deny the Court a power to enjoin a breach of an award. ENA submitted that the present case is analogous to that in CFMEU v Gordonstone. An AWA is a new instrument created by statute and conferring new rights, and the remedies specified by the WR Act should be treated as a code.
29 ENA also referred to Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410 (“Yango v First Chicago”) and Nelson v Nelson (1995) 184 CLR 538. In those cases the High Court considered the proper approach to the question of whether an instrument (in Yango v First Chicago, a contract, in Nelson v Nelson, a trust) which contravenes a statute may be set aside. The High Court held that the question is answered by construing the statute in the ordinary way, having regard to its language and purpose (Yango v First Chicago at 413, 423, 425; Nelson v Nelson at 570). ENA submitted that the scheme for approval of AWAs by the Employment Advocate and the “agreement” between the Government and the Democrats reveal an intention not to render void (or voidable) AWAs which have been approved by the Employment Advocate. The purpose of s 170WG(1), it was said, is sufficiently served by the imposition of penalties.
30 In response, the applicants submitted that ENA misstated the intention of the legislature in enacting Pt VID. The purpose was to enable the Employment Advocate to scrutinize AWAs to ensure that they were genuinely consented to by the parties. The purpose was not to prevent the Court from avoiding an AWA if it found that the AWA had been entered into under duress even though the Employment Advocate had approved it.
31 The applicants also emphasised that the principle stated by Isaacs J in Josephson v Walker is a prima facie presumption only. As Isaacs J noted later in his judgment (at 701-702):
“But on examination of the legislation, the legislative intention may be found to be different … If the fair reading of the Statute leads to the view that Parliament intended to create the right absolutely and independently of any specific form of remedy, the … action is well brought. If on the other hand the proper construction is that the right and the remedy are inseparable, that they are combined and essential parts of a new scheme of public policy, then the action is wrongly conceived … .”
32 In this case, it was said, the presumption is rebutted because the construction of the statute contended for by ENA has the absurd consequence that if an AWA is procured by duress or fails to meet other statutory requirements for approval (ss 170VPA and 170VPB) but is nevertheless approved by the Employment Advocate, the Court does not have the power to set aside the AWA.
33 I turn to consider the question of power. To ascertain whether s 23 confers a power to declare an AWA void if duress has been applied, it is first necessary to consider the purpose of Pt VID of the WR Act. Part VID must be construed by reference to the terms of the WR Act, with a view to promoting the purpose of the WR Act, as revealed by its terms. The purpose and objects of Pt VID were considered at length in earlier judgments in this proceeding. It is unnecessary to repeat that analysis. It is sufficient to note that in an earlier judgment, I described the policy revealed by the terms of Pt VID as follows ((1999) 166 ALR 663 at [38]):
“Part VID creates a class of industrial instrument which depends upon the agreement of an employer and an employee. … Evident in this scheme is a policy that any agreement reached between an employer and an employee (or their agents) is reached through a process of real and not illusory negotiation and general agreement.”
34 Similarly, the Full Court described the policy as being ((2000) 97 FCR 186 at [24]):
“… that AWAs should be negotiated and concluded openly and freely at arm’s length without outside interference and without either party being deceived or misled.”
35 With this in mind, it is necessary to examine the provisions of the WR Act that bear upon the question of whether Parliament has prescribed an exhaustive code of remedies if it is established duress was applied when an AWA was made. Having regard to the submissions of ENA, a convenient starting point is to compare the original Bill (before amendment in the Senate) and the WR Act as enacted. Such a comparison sheds light on the immediate purpose of the provisions ultimately enacted by the Parliament. It is legitimate to pay regard to amendments made to a Bill in construing the resultant Act. As Barwick CJ said in Commissioner for Prices and Consumer Affairs (SA) v Charles Moore (Aust) Ltd (1977) 139 CLR 449 at 457 (before the enactment of ss 15AA and 15AB of the Acts Interpretation Act 1901 (Cth)):
“[W]hilst I am quite clear that no relevant assistance can be obtained from speeches in the legislature, even from the second reading speech of the Minister introducing the Bill, I can see the possibility of relevant profit in knowing the changes which take place in the Bill between its introduction and its passage. These, unlike the speeches, result from action of the legislature itself. The changes may well be classified as travaux preparatoires to which heed is paid in other systems of law. However, authorities of long standing would not allow of this possible advantage being taken.”
36 However, the position has since altered as Kirby J discussed in Barwick v Law Society of New South Wales (2000) 169 ALR 236 at [95]:
“The deletion of this provision following earlier consideration of the exposure draft bill, and the substitution of the general power in the Commissioner to accept a complaint made after three years following the conduct complained of, indicate clearly enough a changed purpose to which effect should be given. By reference to a number of old authorities Sheller JA expressed doubt that a court should, or would, pay regard to such a consideration. However, with respect, paying such regard does not involve calling into question the internal proceedings of a parliament; simply deriving instruction from the course of law-making. It does not involve the use of illicit materials; solely public records readily available and referred to in the parliamentary debates. Formerly courts were unconcerned with pre-legislative materials or debates in parliament or explanations there of the suggested purposes of legislation. However, the tendency both of general legislative provisions and of the common law itself has, in recent years, been to receive relevant pre-legislative and legislative materials to an extent that was previously forbidden. This tendency is part of a contemporary endeavour by the courts to avoid the excessively literalist construction of statutes, to prevent the misfiring of the parliamentary purpose and to promote and purposive interpretation of the legislative text. The consideration of an obviously relevant change to a proposed bill or its amendment during its passage through parliament, which helps to resolve an ambiguity or to explain parliament’s purpose more clearly, is consonant with such developments.”
37 The original Bill provided that an AWA started to operate, at the earliest, on the day after a filing receipt was issued by the Employment Advocate (cll 170VD and 170VJ(1)). The filing of AWAs with the Employment Advocate was governed by proposed Div 5 of Pt VID. The Employment Advocate was obliged to issue a filing receipt if satisfied that the AWA met the “filing requirements” (cl 170VN(2)). The filing requirements included that the AWA was signed and dated by the parties and that the employer had filed a declaration stating that the AWA complied with various requirements set out in the Bill (which it is not necessary to detail) (cl 170VO(1)). An employer was prohibited from making a false or misleading declaration (cl 170VP). An AWA ceased operating either when the parties made a written agreement to terminate the AWA or if, after the nominal expiry date of the AWA, a party filed a unilateral termination notice with the Employment Advocate (cl 170VJ(1) and cl 170VM), or else when a new AWA between the parties started to operate (cl 170VJ(2)).
38 The Employment Advocate was established by proposed Pt IVA. Among the Employment Advocate’s functions were “performing functions under Pt VID, including functions relating to the filing of AWAs and ancillary documents”, “investigating alleged breaches of AWAs, alleged contraventions of Part VID and any other complaints relating to AWAs” and “providing free legal representation to a party in a proceeding under Part VID … if the Employment Advocate considers this would promote the enforcement of the provisions of those Parts” (cl 83BB (d), (e) and (g)). The Minister was empowered to give directions specifying the manner in which the Employment Advocate was to exercise or perform his or her powers or functions, and the Employment Advocate was obliged to comply with such a direction (cl 83BC). The Employment Advocate was to be staffed by persons appointed or employed under the Public Service Act 1922 (Cth) and made available by the Secretary to the Department (cl 83BD), though the Employment Advocate could delegate any of his or her powers or functions to a person appointed or employed by the Commonwealth, a State or a Territory (cl 83BE(1)). The Employment Advocate could also appoint as authorised officers persons employed or appointed by the Commonwealth, a State or a Territory (cl 83BG(1)). An authorised officer was given certain powers for the purpose, inter alia, of ascertaining whether Pt VID had been complied with (cl 83BH).
39 Proposed Div 9 imposed several obligations and prohibitions relating to AWAs, including, in cl 170WG(1), that a person was not to apply duress to an employer or employee in connection with an AWA or ancillary document.
40 The enforcement of Pt VID was governed by proposed Div 7. The first clause in that Division was cl 170VV, and sub-cl (1) enabled the Court to make an order imposing a penalty on a person who contravened a penalty provision. A number of provisions, including the present s 170WG(1), were designated penalty provisions by cl 170VV(4). However, all of these provisions were in other Divisions of Pt VID. Clause 170VV(3) provided:
“An application for an order under subsection (1) that relates to an AWA or ancillary document may be made by a party to the AWA or ancillary document.”
41 In addition to conferring a right to bring proceedings seeking a penalty for the contravention of a penalty provision, Div 7 also created a right to bring or maintain what could aptly be described as statutory causes of action. Each of the provisions creating a cause of action also conferred jurisdiction on an eligible court to hear and determine it.
42 The first statutory cause of action was an action for damages for breach of an AWA. Clause 170VW(1) provided:
“A party to an AWA who suffers loss or damage as a result of a breach of the AWA by the other party may recover the amount of the loss or damage in an eligible court.”
43 The second statutory cause of action was an action for damages arising from the manner in which the AWA came about including when the AWA was made under duress. Clause 170VX(1) provided:
“A person who suffers loss or damage as a result of having made an AWA:
(a) under duress; or
(b) as a result of relying on a false or misleading statement that was knowingly made by another person;
may recover the amount of the loss or damage in an eligible court from the person who applied the duress or who made the false or misleading statement.”
44 Then Pt VID went on to confer specific additional powers on an eligible court. The first was a power to vary or set aside the AWA including when it had been made under duress. Clause 170VY relevantly provided:
“(1) If an eligible court is satisfied that an employer or employee made an AWA:
(a) under duress; or
(b) as a result of relying on a false or misleading statement that was knowingly made by another person;
the court may make an order setting aside or varying the AWA.
(2) The order takes effect from the date of the order, or from a later date specified in the order.”
45 The second power conferred on an eligible court was to grant injunctive relief. Clause 170VZ provided:
“An eligible court may grant an injunction requiring a person not to contravene, or to cease contravening, this Part.”
46 The Division, then, indirectly, conferred power on an eligible court to order interest and also allowed the two statutory causes of action to be brought in a magistrate’s court by means of a small claims procedure.
47 Several observations may be made about these provisions in the original Bill. First, the role of the Employment Advocate in the process by which an AWA took effect was limited to receiving AWAs and ancillary documents for filing, being satisfied that the prescribed filing requirements had been met, and issuing filing receipts. Secondly, while the functions of the Employment Advocate under Pt IVA were cast in sufficiently wide terms to suggest that the Employment Advocate could receive and investigate complaints of the application of duress in connection with the making of an AWA, there was nothing in the Bill to suggest that the Employment Advocate could refuse to issue a filing receipt, or otherwise prevent an AWA taking effect, on the basis that duress had been applied. Any action by the Employment Advocate would apparently have been limited to providing free legal representation to a person applying to the Court to enforce Pt VID. And thirdly, the application of duress could have given rise to proceedings under cl 170VV(3) for a penalty. It could also have given rise to the maintenance of the statutory cause of action under cl 170VX(1), enabling a party to an AWA to obtain damages (cl 170VX(1)), and an order setting aside or varying an AWA (cl 170VY(1)). In my opinion, the better view is that the power conferred by cl 170VY to vary or set aside an AWA was in aid of the jurisdiction to determine the statutory cause of action under cl 170VX. The section conferring the power is immediately after the section creating the statutory cause of action and each section uses substantially the same language. The language and context suggest that the two sections are to be read together.
48 As finally enacted, Part VID provides for a greater role for the Employment Advocate in the process by which AWAs take effect. Also, a distinction is now drawn between a new employee and an existing employee. Sections 170VD and 170VJ prescribe the manner in which an AWA takes effect:
“170VD An AWA or ancillary document has effect as provided by this Part, and not otherwise. In particular:
(a) an AWA for a new employee has no effect before a filing receipt is issued for the AWA; and
(b) an AWA for an existing employee has no effect before an approval notice is issued for the AWA.”
170VJ (1) An AWA for a new employee starts operating on the later of:
(a) the day after a filing receipt is issued for the AWA; or
(b) the day specified in the AWA as the starting day; or
(c) the day the employment commences;
and stops operating at the earlier of the following times:
(d) the end of the day when a refusal notice is issued in relation to the AWA; …
(2) An AWA for an existing employee starts operating on the later of:
(a) the day after an approval notice is issued for the AWA; or
(b) the day specified in the AWA as the starting day; …”
49 The filing of AWAs with the Employment Advocate and the issuing of filing receipts are governed by Div 4. The Employment Advocate is obliged to issue a filing receipt if satisfied that the “filing requirements” have been met, or if the requirements have not been met, that the failure to meet them does not disadvantage a party to the AWA: s 170VN(2). The “filing requirements” are as they appeared in the original Bill, with an additional requirement that any other information required by the Employment Advocate be provided: s 170VO(1).
50 The approval of AWAs by the Employment Advocate is governed by Div 5. The Employment Advocate must approve an AWA for which a filing receipt has been issued if satisfied that the AWA meets the “additional approval requirements”: s 170VPB(1)(b). The Employment Advocate must then issue an approval notice: s 170VPF(1). Otherwise the Employment Advocate must refuse to approve the AWA and issue a refusal notice: ss 170VPB(4) and 170VPF(2). The “additional approval requirements” include the requirement that “the employee genuinely consented to making the AWA”: s 170VPA(1)(d).
“(1) A person other than:
(a) a party to an AWA; or
(b) a bargaining agent of a party;
must not be allowed to make submissions, or to be heard, in relation to the filing, approval, variation or termination of the AWA.
(2) If the Employment Advocate so requests, a person authorised in writing by a party to an AWA for that purpose may help the party in relation to the approval, variation or termination of the AWA by explaining, to the Employment Advocate, the party’s understanding of the effect of the AWA or an ancillary document. Such a person must not be allowed to make submissions or to be heard for any other purpose.”
53 The provisions discussed to this point have several features of relevance. First, one of the clear purposes of Div 5 is to ensure that an AWA does not take legal effect unless the Employment Advocate is satisfied that it has been genuinely consented to. This reflects the more general purpose of Pt VID that the AWA be a freely negotiated agreement. Secondly, the WR Act makes no express provision concerning the manner in which the Employment Advocate is satisfied whether an AWA has been genuinely consented to.
54 All the Act provides is that the Employment Advocate, in performing such a function, may invite submissions from the parties (s 170WHA), is not subject to direction by the Minister (s 83BC(1)), and may only delegate the function to a person employed under the Public Service Act (s 83BD and 83BE(2)). Beyond that, the process would appear to be a matter entirely for the Employment Advocate, subject presumably to principles of administrative law. While the instrument must be signed and witnessed: see s 170VO(1)(a), a bare signature would be unlikely to say anything about how the signature, and the apparent agreement reflected in the proposed AWA, had been procured. Thirdly, while Pt IVA might enable the Employment Advocate to receive and investigate complaints about the application of duress (as noted above) after the approval of an AWA, there is no express power on the part of the Employment Advocate to “withdraw” approval of an AWA. Though it is not necessary to determine the question, I doubt that such a power is to be implied by operation of s 33(3) of the Acts Interpretation Act 1901(Cth), because I do not think that the Employment Advocate, in issuing an approval notice, makes, grants or issues “an instrument”, within the meaning of that sub-section. On present authority, such an instrument must be of a legislative character (Australian Capital Equity Pty Ltd v Beale (1993) 41 FCR 242 at 256-7, Minister for Immigration & Multicultural Affairs v Sharma (1999) 90 FCR 529 at [82], Dutton v Republic of South Africa (1999) 162 ALR 625 at [32]) whereas an approval notice issued by the Employment Advocate appears to be executive in character.
55 Section 170WG(1) is the same as cl 170WG(1) in the original Bill. However, Div 7 of Pt VID differs from the original Bill in two respects. First, cl 170VX of the Bill, which would have created a statutory cause of action for damages following the application of duress or the making of misleading statements, has been removed. In its place is a provision (s 170VX) enabling an employee to recover in Court compensation for a shortfall in entitlements between an award and an AWA if an AWA stops operating because the Employment Advocate issues a refusal notice. Secondly, cl 170VY, conferring on the Court a power to set aside or vary an AWA, has been removed.
56 What flows from these amendments to the original Bill is, first, there remains a statutory prohibition on the application of duress in connection with an AWA (s 170WG(1)) and there continues to be a statutory mechanism by which the issue of duress may be brought before the Court (s 170VV) as proceedings for a penalty. In other words, the WR Act contemplates that there may be cases, such as the present, where a finding is made by a Court that an AWA was not genuinely consented to, though this circumstance had not been apparent to the Employment Advocate, and relief is granted. Indeed, having regard only to the statutory mechanism under which the Employment Advocate considers the question of consent to an AWA, it appears to be unlikely that the fact that duress has been applied will be apparent to the Employment Advocate. Secondly, the removal of cll 170VX and 170VY did not, in my opinion, have the effect contended for by ENA. The omission of cl 170VX involved the removal of a statutory cause of action for damages for loss resulting from the application of duress. However, the removal of cl 170VY, which created no cause of action, conferred no right, and was in aid of the jurisdiction to hear and determine the statutory cause of action created by cl 170VX, simply resulted in there being no express power to set aside or vary an AWA. The removal of the power and the associated statutory cause of action by amendments to the Bill does not, in my opinion, dictate a conclusion that it was intended a similar power could not be exercised in proceedings for a penalty under s 170VV for contravention of s 170WG(1) if the power arose elsewhere.
57 An AWA is a novel statutory instrument that, by operation of the WR Act, confers new rights and imposes new obligations. I accept that there is a prima facie presumption that Parliament has specified the remedies to accompany those rights: Josephson v Walker (supra). However, as already noted, the purpose of Pt VID, revealed by its terms, is to create a form of statutory agreement whose legal effect depends on the agreement having been freely negotiated. An AWA tainted by the application of duress is not the freely negotiated statutory agreement it was the purpose of Pt VID to create. It is the antithesis of such an agreement. This, in my opinion, tends to indicate that the issue of construction should not simply be answered by the operation of a presumption that Pt VID, by not specifically empowering the Court to avoid an AWA procured by duress, can be taken to have deprived the Court of the power to grant that remedy if the power might arise elsewhere.
58 ENA submitted that the intention of Parliament in enacting Pt VID is recorded in the agreement between the Commonwealth Government and the Australian Democrats relied upon by ENA. I accept that there is ambiguity and obscurity attending the provisions in question (Div 7 and s 23) and I can have recourse to extrinsic materials such as the agreement. Nonetheless is necessary to bear in mind the observations of Dawson J in Mills v Meeking (1990) 169 CLR 214 at 234:
“The difficulty has been in ascertaining the intention of Parliament rather than in giving effect to it when it is known. Indeed, as everyone knows, the intention of Parliament is somewhat of a fiction. Individual members of Parliament, or even the government, do not necessarily mean the same thing by voting on a Bill or, in some cases, anything at all. The collective will of the legislature must therefore be taken to have been expressed in the language of the enactment itself, even though that language has been selected by the draftsman, who is not a member of Parliament.”
59 Equally apposite are the observations of Kirby J in Byrnes v R (1999) 199 CLR 1 at [80]:
“… [S]ubjective intentions, even those that may reasonably be imputed to the makers of legislation, are irrelevant. The purposes of a legislature must be ascertained from the language of the legislation which it enacts. This is a cardinal rule. There are strict limits on the extent to which courts can fill gaps in legislation where they come to light, particularly where such gaps expose a person affected to additional criminal punishment involving the deprivation of liberty. These considerations reveal, once again, why it is incorrect, and potentially misleading, to talk of the "intention" of Parliament. Here the "intention", in a general sense, is clear enough. But the focus must be upon the meaning and effect of the legislation appearing from its words. As this case illustrates, to conceive of the problem in terms of legislative "intention" is to invite a risk of error. Avoidance of that fiction helps us to prevent such a risk.”
60 See also Northern Territory of Australia v GPAO (1999) 196 CLR 553 at [236] per Kirby J, Eastman v R [2000] HCA 29 at [146] per McHugh J and State of New South Wales v Taylor [2001] HCA 15 at [74] per Kirby J.
61 The Court can have regard to extrinsic materials in interpreting a statute in order to identify the mischief which the statute was intended to remedy: Attorney-General (Cth) v Oates (1999) 198 CLR 162 at [28], CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408, Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 99, 112-113. However, caution must be exercised in evaluating the impact of the extrinsic material: see e.g. Collector of Customs v Savage River Mines (1988) 79 ALR 258 (oral evidence from a public servant); Federal Commissioner of Taxation v Murray (1990) 21 FCR 436 (ministerial notes and correspondence).
62 Clause 3.16 of the agreement between the Government and the Australian Democrats (set out at [24] above) concerns a particular matter and contains two elements. It describes both the result or effect of what was agreed and also the reason why it was agreed. The result was that there was no need for the Court to be able to set aside or vary an AWA made under duress. The reason was that such agreements would be vetted "up front". The reason given may cast light on what was agreed and what was intended by the amendment to the Bill removing cl 170VY. However it is not entirely clear what view the stated reason reflected. The reason may reflect the view of the parties that it was unnecessary for the Court to possess a power to set aside or vary an AWA procured by duress, because the Employment Advocate would ensure that such an AWA was never approved. It is possible this view was held by the parties notwithstanding that the very essence of duress of the type under consideration is that it has occurred in circumstances where there would be the appearance of agreement and appearance of genuine consent and the statutory regime for initial vetting would not ensure that instances where duress was applied would be revealed to the Employment Advocate. On the other hand, it may be that the parties believed that an insignificant, and therefore acceptable, number of AWAs would be approved by the Employment Advocate notwithstanding that duress had, in fact, been applied. Other factors may have been considered. It is difficult to discern what the reason set out in cl 3.16 means and the stated reason casts no real light on why the Bill was amended.
63 The statement of the result or effect in cl 3.16 is also unclear. It simply declares there would be no longer a need for the Court to have a particular power. What this statement leaves unanswered is the question of whether the parties to the agreement intended any potential general source of power (such as s 23) should not operate to confer power. It may well be that this issue was not considered. More fundamentally, however, the agreement is a political document, concluded between some members of Parliament potentially involving political compromise and this may explain the way it is expressed. While the supplementary explanatory memorandum which followed the agreement is expressed to contain “amendments to be moved on behalf of the Government and the Australian Democrats” and to be “circulated by authority of the Minister for Industrial Relations, the Honourable Peter Reith MP, and Senator Kernot”, the memorandum makes no reference to the “agreement”, and does not contain any statement to the effect of clause 3.16 of the “agreement”. The agreement, in my opinion, does not assist in determining what was, for present purposes, intended by the amendments made to the Bill presently under consideration.
64 While the fact that the amendments were made to the Bill and cl 170VY was removed does not, of itself, warrant a conclusion that s 23 is not a source of power to declare void an AWA procured by duress (of the type contemplated by s 170WG), I have nonetheless concluded that the section is not a source of power to make such an order. Section 23 does not provide authority for the granting of relief where under the general law or by statute, otherwise there is no case for that relief: see Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at [33] (the High Court was there considering injunctive relief). As Gibbs CJ and Stephen, Mason and Wilson JJ said in Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 at 161 (again when speaking of injunctive relief):
[Section 22] does not confer authority to grant an injunction in circumstances where a plaintiff has no case for relief by way of injunction under the general law or by statute. So also with s 23; it arms the Court with power to make all kinds of orders and to issue all kinds of writs as may be appropriate, but it does not provide authority for granting an injunction where there is otherwise no case for injunctive relief.
65 In the present matter the applicants are not seeking an order voiding, ab initio, a contract entered into under duress in inter partes civil litigation. If that was an aspect of the legal controversy before the Court then s 23 might confer power to make an order concerning the legal rights as between the parties. That might be because such an order reflects relief available under the general law in a matter in which duress is raised as an issue (as to remedy see Cheshire and Fifoot: Law of Contract (6th ed.) at [807]). However no finding has been made (or invited) that any agreement was entered into under duress of the type known to the common law involving a consideration of the quality of the assent. Indeed, to this point, the applicants have successfully argued that the issue raised in these proceedings for a penalty for contravention of s 170WG, is not whether duress with those characteristics was involved but whether conduct of a similar though different kind has taken place. In addition, what is sought is not an order avoiding a contract. Rather it is, in substance, a declaration (as final relief) that an instrument, an AWA, which owes its existence to a statute and has legal effect because of that statute (s 170VJ and Division 6), does not have legal effect and, in some senses, never had legal effect: but see FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1997) 41 NSWLR 559 at 563-4. It is a declaration sought as final relief in proceedings for a penalty. The applicants are seeking an order nullifying the effect of s 170VJ and Division 6 in the absence of an express conferral of power to make such an order. I have little doubt that s 23 does not confer such a power: see Coopers Animal Health Australia Ltd v Western Stock Distributors Pty Ltd (1988) 67 ALR 390 at 420. I do not view the judgment of the High Court in Patrick Stevedores v MUA as indicating some wider operation for s 23. In that matter the injuctive relief in question was interlocutory relief only, effectively preserving the status quo pending a final hearing and, in addition, the proceedings involved an action in the Court’s accrued jurisdiction or as an associated matter alleging a tortious conspiracy in which injunctive relief could issue: see [33] of the judgment of Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ.
66 I am satisfied that s 23 of the FCA Act does not empower the Court to make a declaration avoiding the AWAs.
Penalty
67 The applicants seek an order under s 170VV of the WR Act that ENA pay a penalty for contravening s 170WG(1), and an order under s 356 that the penalty be paid to the individual applicants, or alternatively, to the Community and Public Sector Union (“the Union”).
68 A preliminary question is how many contraventions of s 170WG(1) have occurred. This issue has arisen in other proceedings where contraventions of s 298K of the WR Act were alleged: see Maritime Union of Australia v Geraldton Port Authority (2000) 94 IR 404 at [41], Automotive, Food, Engineering, Printing & Kindred Industries Union v DMG Industries Pty Ltd (2000) 102 IR 175 at [17]-[18], Community & Public Sector Union v Telstra Corporation Limited [2001] FCA 1364 (“CPSU v Telstra”) at [3]. In those cases it was held that where a proscribed act impacted on more than one employee, a separate contravention occurred in respect of each employee. This conclusion was based on a construction of s 298K which, it was held, proscribed conduct in relation to a particular employee, not employees generally. Also of significance was that Pt XA of the WR Act does not contain a provision like s 178(2), which provides that where two or more breaches of a term of an award, order or agreement are committed by the same organisation or person, and arise out of one course of conduct, the breaches are taken to constitute a single breach. Section 170WG(1), likewise, speaks of the application of duress “to an employer or employee”. Pt VID also lacks a provision like s 178(2). By parity of reasoning, the application of duress to a number of employees may give rise to a separate contravention of s 170WG(1) in respect of each employee.
69 Counsel for ENA submitted that the duress ultimately arose from a single decision of ENA in April 1998 to withdraw the option of employment under the board determination made under s 81C(3) of the Public Service Act 1922 (Cth). Accordingly, it should be concluded that there was a single contravention of s 170WG(1).
70 However, it should be apparent from [98] to [111] of my reasons for judgment of 18 May 2001 that the decision of ENA gave rise to duress because of a range of circumstances, some of which concerned individual persons. These included the circumstances that each individual was seeking employment with ENA to do substantially the same work as they had done in the Australian Public Service (“APS”) ([101] to [103]), and that they wanted to negotiate about the framework by which their employment with ENA would be regulated ([104] to [109]). Bearing in mind that s 170WG(1) speaks of the application of duress to “an employee”, the better view is that the conduct of ENA in relation to each of Schanka, Walden, Burns and Brushe constituted a separate contravention of s 170WG(1). Consequently, there have been four contraventions of s 170WG(1).
71 The maximum penalty which may be imposed on a body corporate for a contravention of s 170WG(1) is $10,000: s 170VV(2). The applicants submitted that a maximum penalty should be imposed in respect of each contravention. ENA submitted that the penalty should be fixed in accordance with the principle of totality, taking into account as a mitigating factor that the contraventions arose from a single course of conduct on the part of ENA.
72 A range of circumstances may be relevant to question of the appropriate penalty, including, for example, whether the contraventions were intentional, whether there have been previous contraventions, whether the contraventions arose out of one “course of conduct”, any contrition displayed by the wrongdoer, the consequences of the contraventions, and the need to deter future contraventions and secure compliance with the WR Act: see CFMEU v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 at [8]; Seven Network (Operations) Ltd v CEPU [2001] FCA 672 at [4]. In CPSU v Telstra [2001] FCA 1364, Finkelstein J expressed the principle of totality as that “in imposing a penalty for a number of offences it is necessary to ensure that the penalties in aggregate are just and appropriate” (at [7]).
73 In that case, Finkelstein J later observed (at [8]):
“In the case of an offending corporation in breach of legislation such as the Workplace Relations Act, the notion of retribution or punishment does not seem to have a significant role. First, a contravention of this type of legislation does not excite notions of moral responsibility when compared with contraventions of the criminal law where the community has a just expectation that an offender should receive some measure of punishment so that there will be no loss of respect for the law. Put differently, there will not be any real sense of grievance in the community at large if a corporation has not been dealt with in the same way as an offender who attacks individual liberties or freedoms.”
74 For my part I would not view the penalty provisions in the WR Act as benignly as his Honour appears to have. In various ways many of the penalty provisions are designed to protect employees (or past or future employees) at risk, both economically and more generally, because of the unlawful conduct of others. Other penalty provisions are to protect employers from what the legislature views as inappropriate conduct. I would have thought there would be a community expectation that contravention of a penalty provision would be viewed seriously and ought be punished. In the present case, the conduct of ENA involved a denial of the freedom of four employees to negotiate about the manner in which their employment was to be regulated. This is significant individual freedom, as recognised by s 3(c) of the WR Act, which makes it an object of the Act to enable employers and employees "to choose the most appropriate form of agreement for their particular circumstances".
75 Several aspects of this case point the need for a penalty which is something more than nominal. First, the application of duress by ENA deprived Schanka, Walden, Brushe and Burns of an opportunity to negotiate about the form of agreement which would govern their employment with ENA, undermining the object contained in s 3(c) of the WR Act. Secondly, the conduct that constituted duress formed part of a deliberate industrial strategy on the part of ENA. Thirdly, ENA was a corporation wholly owned by the Commonwealth and was a statutory authority for the purpose of s 7 of the Public Service Act 1922 (Cth). The community has a legitimate expectation that it comply strictly with the WR Act. A mitigating circumstance is that each of the contraventions arose from a single course of conduct on the part of ENA. In accordance with the principle of totality, the total of the penalties should be just and appropriate in the circumstances.
76 Taking into account all these circumstances, I consider that an appropriate penalty is $2,500 for each contravention, totalling $10,000.
77 There remains the question of to whom the penalty should be paid. The applicants sought an order that the penalty be paid to the individual applicants, or in the alternative, to the Union, but not into consolidated revenue. ENA submitted that the penalty should be paid into consolidated revenue, because the applicants themselves have incurred no costs in bringing these proceedings. It is admitted by the applicants that the cost of bringing these proceedings has been borne by the Union.
78 The operation of s 356 has been addressed in several decisions of this Court. In Gibbs v City of Altona (1992) 37 FCR 216 (“Gibbs”), Gray J said at 223-224 that "[t]he usual order, when the proceeding is not brought by an inspector appointed under the Act, is for payment to the person or organisation applying for the penalty". This approach was followed by Branson J in CFMEU v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 at [17]-[18] and by Merkel J in Seven Network (Operations) Ltd v CEPU [2001] FCA 672 at [8]. In the latter case, his Honour said "where the conduct in question targets a particular organisation or person and that person is authorised to commence and commences a proceeding for the imposition of a penalty, in the usual course it is appropriate to order that the penalty be paid to the organisation or person". In CPSU v Telstra [2001] FCA 1364, Finkelstein J suggested that "perhaps the ‘usual’ order is to be explained on the basis that often an industrial organisation brings proceedings for a contravention of the WR Act to protect the legitimate interests of its individual members. In such a case it is appropriate for the organisation to receive the penalty, to defray its actual costs and to provide some compensation for the time lost by its staff" (at [26]).
79 In Gibbs, Gray J observed that the reasons for this approach were stated by the Full Court in Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241 (“Seymour”) and Vehicle Builders’ Employees’ Federation of Australia v General Motors-Holdens Pty Ltd (1977) 32 FLR 100 (“Vehicle Builders”). Those decisions concerned s 119 of the Conciliation and Arbitration Act 1904 (Cth), which in summary enabled an organisation, or a member or officer thereof, affected by a breach of an order or award to sue for and recover a penalty in respect of the breach. In those cases, it was observed that s 119 was based on the concept of an action brought by a "common informer": see Seymour at 245 per Northrop J, Vehicle Builders at 111-114 per the Court. (A "common informer" has been described as "a private person suing for private benefit to recover a statutory penalty", as distinct from "a state or official informer": Hawkesbury City Council v Foster & Mushroom Composters Pty Ltd (1997) 97 LGERA 12 at 14-15 per Mason P.) In Vehicle Builders, the Court said at 113 that "each of the persons entitled to institute proceedings under s 119 of the Act … can be said to be an appropriate person selected by the legislature to police the legislation". Similar observations were made about s 356 of the WR Act by Finkelstein J in CPSU v Telstra [2001] FCA 1364 at [23]-[25].
80 In the present case, the applicants were authorised to bring proceedings for a penalty by s 170VV(3). Schanka, Aldridge and Walden were parties to an AWA and were named as applicants at the commencement of proceedings. Burns was later added as an applicant in his capacity as a party to negotiations for a proposed AWA: see (1998) 86 IR 283 at 295-296, (1999) 166 ALR 663 at [44], (2000) 97 FCR 186 at [28] to [34]. The Union, which was named as an applicant at the commencement of proceedings, was later removed as an applicant by consent: see (1998) 86 IR 283 at 284.
81 Section 356 confers a discretion on the Court to order that the penalty be paid into consolidated revenue or “to a particular organisation or person”. In New South Wales, a broadly analogous power to that contained in s 356 is to be found in s 122 of the Fines Act 1996 (NSW). Under that section, where (i) an Act imposes or authorises the imposition of a penalty and makes no provision for its application when recovered, and (ii) the prosecutor is not a police officer, the court before which proceedings are taken to recover the penalty has a discretion to direct that up to one-half of the penalty be paid to the prosecutor. Section 122 re-enacts, in substance, s 5(3) of the Fines and Penalties Act 1901 (NSW), which enabled the payment of up to a "moiety" of the fine to the "informer or other person prosecuting or suing [not being a member of the police force]”.
82 In Workcover Authority of New South Wales v Warrah Ridge Pastoral Co Pty Ltd (unreported, Industrial Court of New South Wales, 23 September 1994), Bauer J considered the history of common informer legislation in New South Wales and the practice of courts in applications by private prosecutors for payment of a moiety of the penalty for breaches of industrial legislation. His Honour’s analysis revealed that a moiety would "in the usual case be accorded to the prosecutor unless good reason be otherwise shown, either as to cause or amount" . This would appear to be the practice of the Industrial Relations Commission in subsequent applications under this legislation: see for example Public Service Association and Professional Officers Association Amalgamated Union of New South Wales v State of New South Wales (unreported, Industrial Relations Commission of New South Wales in Court Session, Schmidt J, 28 April 1999) and Tuckley v State of New South Wales (unreported, Industrial Relations Commission of New South Wales in Court Session, Hungerford J, 7 September 1999).
83 The discretion contained in the provisions in [81] above has also been the subject of consideration in the Land and Environment Court of New South Wales. In Hawkesbury City Council v Mushroom Composters Pty Ltd (1995) 89 LGERA 132 and (1996) 90 LGERA 395, Pearlman CJ refused applications under s 5(3) of the Fines and Penalties Act by an individual and a local council for payment of a moiety of a penalty imposed for contempt of court. In doing so, her Honour observed (at 90 LGERA 397) that provisions such as s 5(3):
· “are designed to encourage common informers to sue for breach of statutes by allowing the informer to recover part of the resulting penalty”;
· “[are] not designed to reward a party bringing proceedings in the discharge of its ordinary functions” (cf. Water Resources Commission v Jackson, Britton and Griffiths (unreported, Land and Environment Court, Bignold J, 7 October 1988), South Sydney Council v Sunny Soon Kiat (unreported, Land and Environment Court, Bignold J, 30 October 1998)); and
· “[are] not designed to reimburse a party for its costs” (cf. Fairfield City Council v Tisonu Pty Ltd (unreported, Land and Environment Court, Cripps J, 18 May 1988)).
The New South Wales Court of Appeal, by majority, upheld her Honour’s reasoning: Hawkesbury City Council v Foster & Mushroom Composters Pty Ltd (1997) 97 LGERA 12 at 22, 24.
84 It can be seen that different courts have developed different practices when exercising the discretion whether to order payment of a penalty to a common informer, though it would appear to be universally recognised that, by enacting common informer legislation, Parliament has sought to enable specified individuals to bring proceedings to enforce legislation by allowing the payment of a penalty to them. In the present case, such a purpose would not be served by an order under s 356 that the penalty be paid to consolidated revenue. Nor does the fact that the applicants have not personally incurred legal costs warrant such an order.
85 However, the question remains whether the penalty should be paid to the individual applicants or to the Union. In Gibbs, the proceedings were brought by the national secretary of a union, though on the evidence, it was likely that his legal costs were met by the union itself. Gray J (at 223-224) considered that this circumstance warranted a departure from the usual practice (referred to in par 78 above), and ordered that the penalty be paid to the union.
86 A slightly different approach was taken by Finkelstein J in CPSU v Telstra, where his Honour observed (at [27]-[28]):
“… [T]here is no reason to make the “usual order”, if that will result in a windfall to an organisation. Proceedings for pecuniary penalties are not to be used for profit. …
An appropriate order (if there be enough funds) would allow the unions a sufficient sum to meet their costs and expenses, including the expense of staff time. The balance (if any) should be paid into the Consolidated Revenue Fund.”
87 The present proceeding was conducted by the Union on behalf of the applicants. In my opinion, the appropriate order is that the whole of the penalty be paid to the Union. It is not necessary to qualify this order in the way done in CPSU v Telstra. This proceeding was commenced in May 1998 and has involved numerous interlocutory disputes. It is inconceivable that the costs borne by the Union would be less than the amount of the penalty.
Relief
88 In their amended application, the applicants seek a declaration that ENA applied duress in contravention of s 170WG(1). Such a declaration would merely repeat the finding I made in my reasons published on 18 May 2001. I see no need to make such a declaration now. For the preceding reasons I propose to order that ENA pay a penalty of $2500 for each of the four contraventions of s 170WG and that within 28 days, ENA pay to the Union the penalties. I also propose to order that the proceeding be otherwise dismissed. This judgment binds all group members.
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I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. |
Associate:
Dated: 15 November 2001
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Counsel for the Applicants: |
R Kenzie QC with C Howell |
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Solicitor for the Applicants: |
Steve Ramsey, CPSU |
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Counsel for the Respondent: |
J Trew QC with L Kaufman and later A Gelbart |
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Solicitor for the Respondent: |
Andersen Legal |
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Date of Hearing: |
29 June, 26 July 2001 |
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Date of Judgment: |
15 November 2001 |
