FEDERAL COURT OF AUSTRALIA

Australian Postal Corporation v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

[2003] FCA 1563

INDUSTRIAL LAW – Application for interlocutory injunction to restrain threatened stoppage of work – Certified agreement between parties still in operation – Whether issues giving rise to threatened industrial action are covered by certified agreement – Forced redeployment covered by a second agreement, the nominal expiry date of which has expired, but which is still in force – Second agreement not an agreement to which s 170MN applies – Prospective loss of special allowance paid to employees undertaking special responsibilities – Whether clause concerning classification of employees in second agreement concerns this matter – Issue concerning use of part-time employees referred to in certified agreement – Whether certified agreement contains any agreement as to terms and conditions of employment in respect of this issue – Significance of reservation of a subject in the certified agreement.

Australian Industry Group v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2003] FCAFC 183 followed

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

Workplace Relations Act 1996 (Cth) ss 170LX, 170MN

AUSTRALIAN POSTAL CORPORATION v COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA

N 2194 OF 2003

WILCOX ACJ

5 DECEMBER 2003

SYDNEY

THE COURT ORDERS THAT:

1.         The application for an interlocutory injunction be dismissed.

2.         The principal proceeding be stood over for directions at 9.30am on Tuesday, 16 December 2003.

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

REASONS FOR EX TEMPORE JUDGMENT

WILCOX ACJ:

1                     This is an application for an interlocutory injunction.  The applicant is Australian Postal Corporation (‘Australia Post’).  The respondent is Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (‘CEPU’).

The Proceedings

2                     The principal proceeding was commenced on 1 December 2003.  At that time, a notice of motion was filed seeking interlocutory orders.  It is necessary only to set out the first order sought.  It is as follows:

‘Until trial or further order, the Respondent (whether by its officers, delegates, employees, members, agents or howsoever otherwise) be restrained from directing, organising, inducing, encouraging, procuring or authorising any employee of the Applicant, employed at any of the sites listed in the Schedule to this Order (“NSW Sites”), to stop work or work other than in accordance with the Australia Post Enterprise Agreement 2001 (“Agreement”)and contracts of employment of any such employees of the Applicant for the purpose of supporting or advancing claims in relation to any of the following matters arising from the Applicant’s proposed restructure of the parcel network at the NSW Sites:

(a)       redeployment of employees in positions other than those identified as preferred options in their expression of interest;

(b)       compensation for the loss of the parcel post allowance;

(c)        the impact on full-time and part-time employments positions.’

The reference to ‘NSW sites’ in that proposed order is explained by a schedule to the notice of motion.  It identifies some 27 parcel sites, all apparently operated by Australia Post.

3                     The notice of motion sought supplementary orders, including orders advising CEPU members of the effect of the order.  This order was sought because it was then proposed that there be a 24-hour stoppage of work to commence at 10.00pm on Wednesday, 3 December 2003 and concluding at 10.00pm on Thursday, 4 December 2003.

4                     The notice of motion came before Branson J on 2 December 2003.  Counsel for CEPU gave an undertaking that his client would not proceed with the proposed stoppage on 3 and 4 December 2003.  On that assurance, her Honour adjourned the interlocutory application for hearing today.  Counsel for CEPU had made it clear that CEPU intended to organise a stoppage at a later date.

The agreements

5                     The evidence discloses the existence of five industrial instruments which bind the present parties.  However, only two of them need be mentioned for present purposes.

6                     The first is an agreement called Australia Post Redundancy/Redeployment/Retraining Agreement 1995 (‘RRR agreement’).  This agreement was certified by the Australian Industrial Relations Commission on 2 February 1996, with an expiry date of 20 April 1996.  I was informed, from the bar table, that the agreement was in operation between the parties, on an uncertified basis, for some time before the formal certification.

7                     It appears the RRR agreement continues to be in force.  The reason for this is that
s 170LX of the Workplace Relations Act 1996 (Cth)(‘the Act’) contains the following provision in respect of the cessation of a certified agreement:

‘(2)      The Agreement ceases to be in operation if:

(a)               its nominal expiry date has passed; and

(b)               it is replaced by another certified Agreement.’

8                     Although the nominal expiry date of the RRR agreement has passed, the parties are agreed that it has not been replaced by another certified agreement.  Accordingly, the agreement has not ceased to be in operation.

9                     The second relevant agreement is the Australia Post Enterprise Agreement 2001 (‘the certified agreement’).  This agreement was certified by the Australian Industrial Relations Commission on 14 January 2002.  By its terms, it remains in force until 20 February 2004.

10                  The evidence establishes that, when the certified agreement was being negotiated, Australia Post was working on a proposal to reorganise its parcel handling system; principally by establishing a central depot at which there could be greater mechanical handling of parcels.  The proposed reorganisation was referred to in a letter dated 30 August 2001, written to Mr Brian Baulk of CEPU by Mr Peter Rogan, Manager, Workplace Relations, Corporate Human Resources, for the Manager of the Human Resources Mail and Networks Division of Australia Post.  This letter referred to a decision by the Board of Australia Post:

‘to approve a proposal for the development and implementation of a new centralised Parcel network to be fully operational by October 2003.’

11                  I interpolate that the target date has apparently slipped a little.  It is now expected that the new system will come into effect in about March or April 2004.

12                  The letter to Mr Baulk set out reasons for the proposed changes.  It contained an attachment headed Parcel Network Restructure and dealt with various operational and human resources aspects of the restructure.  Under the heading ‘Human Resources’, the following points were noted:

‘·    At Chullora and Ardeer –

·        establish as High Performance Organisation sites.

·        transition and induction arrangements for relocated staff.

·        opportunities the new sites present for the development of arrangements covering employment, staffing and rostering, job design, work organisation and possibly a performance-based remuneration system.

·          At Chullora, Ardeer and Underwood –

·        building (functional design brief), equipment specification and site layout.

·        safe work practices and staff trained for their new roles.

·          Reviews of staffing in transport.

·          Training for all staff in the network involved in the change process.

·          Application of the RRR Agreement and use of natural attrition.

·          Consultative arrangements at national, State and site levels, and staff participation.’

13                  Clause 23 of the certified agreement contained some reservations.  They included, by cl 23(4), ‘parcel structure’.

14                  The certified agreement itself does not explain what is meant by this term.  However, a document that was apparently published by the parties at the time of the making of the certified agreement offers explanations of some terms of the agreement.  This document is called Enterprise Agreement 2001, EBA 5, Building the Future.  It is a printed document, apparently intended to be widely circulated, including, no doubt, amongst employees of Australia Post.  At pg 14, the document refers to cl 23(4) of the certified agreement and its use of the term ‘parcel structure’.  The relevant explanatory note reads as follows:

‘Parcel Structure -

Whilst no separate review of the Parcel Structure is planned in advance of the Parcel Network/Technology changes, this reservation provides scope to vary the structure if any relevant changes are identified as part of the Mail Processing Review or to facilitate implementation of the Parcel Network/Technology changes.’

15                  It is clear that the ‘parcel network/technology changes’ that are referred to in this explanation include the proposed change to a more centralised parcel system.  If there was any doubt about that proposition, it is made clear by a statement in the affidavit of Mr Rogan, filed in this proceeding, of 1 December 2003.  At para 35 of his affidavit, Mr Rogan said:

‘The reserved matter in clause 23.4 of EBA 5, “Parcel Structure”, was included to accommodate the potential need for discussions in relation to the proposed Parcel Network Re-structure and a separate review of the Mail Processing Structure.’

The statutory provisions

16                  The application presently before the Court arises out of Division 8 of Part VIB of the Act.  That Part concerns negotiations for certified agreements.

17                  The scheme of Division 8 is to permit industrial action to be undertaken, but subject to specific conditions.  Permitted industrial action is called, by the Division, ‘protected action’.  Section 170MO requires a party proposing to take protected action to give notice of that fact and there are provisions as to the terms of the notice.  It is not necessary to go to those provisions for present purposes.

18                  However, it is necessary to refer to s 170MN(1) of the Act.  That subsection is critical to the argument in the present application.  That subsection reads as follows:

‘From the time when:

(a)   a certified agreement; or

(b)   an award under subsection 170MX(3) (which deals with the exercise of arbitration powers on termination of a bargaining period);

comes into operation until its nominal expiry date has passed, an employee, organisation or officer covered by subsection (2) must not, for the purposes of supporting or advancing claims against the employer in respect of the employment of employees whose employment is subject to the agreement or award, engage in industrial action.’

19                  A Full Court of this Court recently considered the proper interpretation of this subsection in Australian Industry Group v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2003] FCAFC 183 (‘Australian Industry Group’).  At para 29 of their reasons, French and von Doussa JJ noted the terms of the subsection and its use of the word ‘employment’.  They referred to a definition of that term in the Shorter Oxford English Dictionary: ‘[t]he action of employing; the state of being employed’.  Their Honours went on to say:

‘In the context of a statute which governs employer and employee relationships, the state of being employed is ultimately defined by the terms and conditions of the employment.’

20                  At paras 31, 32 and 35–37, their Honours referred to the arguments advanced on each side of the record in the case before them as to the proper interpretation of s 170MN(1).

‘The evident purpose of s 170MN(1), whatever the width of the prohibition it imposes, is to prohibit industrial action relating to matters capable of inclusion in a certified agreement or an award under s 170MX(3). This reinforces the proposition that “employment” as used in the section refers generically to terms and conditions of employment. On this meaning of the word “employment” the prohibition relates to industrial action engaged in for the purpose of supporting or advancing claims in respect of the terms and conditions of employees whose terms and conditions are subject to the relevant agreement or award.  An alternative approach is to treat “employment” as a reference to the “employment relationship”.  But in the setting of this statute the better view is that the employment relationship is defined by reference to its terms and conditions rather than some wider numinous reality.  The construction, which acknowledges that “employment”, in this setting, is a reference to terms and conditions of employment leaves open the constructional choice which faced her Honour, albeit the choice is differently framed.

On one reading of s 170MN(1) it prohibits industrial action for the purpose of supporting or advancing claims against the employer in respect of the terms and conditions of employment of employees whose terms and conditions of employment are subject to the relevant agreement or award. The alternative reading is that s 170MN(1) prohibits industrial action for the purpose of supporting or advancing claims against the employer in respect of the terms and conditions of employment of employees which terms and conditions of employment are subject to the relevant agreement or award. The word “whose” is the word which is actually used in the subsection. If construction is to be based upon the ordinary English meaning of the words in their context then that construction which her Honour identified as “perhaps the most obvious” best accords with the ordinary meaning of the words. The question is whether the other construction is open and, if so, whether it should be preferred.

…

Each of the competing constructions of s 170MN may be said to advance the statutory purpose in different ways. AIG submits that the construction for which it contends encourages parties to enter into comprehensive agreements.  It does this because, during the period of operation of the agreement, a party is prohibited generally from taking industrial action for the purpose of supporting or advancing claims in respect of the employment of employees whose employment is subject to the agreement. And although AIG accepts that the Act permits a multiplicity of agreements nothing in it encourages such agreements.

For the AMWU it is submitted that the policy behind s 170MN is to encourage parties to adhere to their agreements once those agreements are made. On the construction of s 170MN(1) for which the AMWU contends, it is said that parties to industrial negotiation will be able to negotiate in a way which leaves open, at a future date, the possibility of protected industrial action or which precludes it.  A construction of s 170MN which rules out further effective bargaining where an agreement about any aspect of employment has been certified would hardly promote the objects of the Act.

Both views of the purposes of s 170MN have force. Each side of the argument can point to anomalous outcomes which could arise from the other's approach. In the end however, in our opinion, the preferable view is that which permits and encourages flexibility in the bargaining process. Comprehensive agreements may be desirable in some and perhaps most circumstances. But there may be cases when it will be in the interests of good workplace relations to conclude an agreement on some issues and leave less pressing issues for a subsequent agreement. If any certified agreement, however narrow its terms, has the effect that industrial action is prohibited generally in respect of the employment relationship to which it applies the result will be effectively to discourage resort to a possible option for the partial resolution of complex industrial negotiations.’

The issues

21                  The evidence indicates that negotiations have ensued between Australia Post and CEPU regarding the workplace relations implications of the changed parcel system.  There are apparently three unresolved issues:

(i)         members being forced to take up positions allocated by Australia Post outside the preferred options provided by individual members in their expressions of interest;

(ii)        alleged inadequate amounts being offered by Australia Post for the purpose of compensating the loss of the parcel post allowance as part of members’ normal salary; and

 (iii)      the refusal by management to agree to provide only full-time employment opportunities in future at the Sydney parcel and gateway facilities and parcel and delivery centres and hubs. 

22                  The question debated today is whether or not it is permissible for CEPU to take protected action in relation to these issues, having regard to s 170MN(1) of the Act.  Counsel for Australia Post, Mr N Green QC and Mr S Meehan, argue all three matters are covered by the certified agreement, which remains in force; accordingly, action in respect of those matters is precluded by s 170MN(1) of the Act.  Mr R Reitano, for CEPU, contends to the contrary.

23                  In considering the arguments in relation to the three contentious issues, it is relevant to note the approach to this type of issue which was stated by Ryan J in Kilpatrick Green Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Anor [1998] FCA 559 (‘Kilpatrick Green’) at pgs 10-11.  His Honour said:

‘Having regard to what I perceive to be the policy underlining Pt VIB of the Act and, in particular, Div 8, I consider that the framers of the certified agreement should be taken to have intended to deny to one party recourse to protected industrial action to pursue claims apparently contemplated as open during the life of the agreement, only if the language they have chosen intractably dictates such a construction.’

24                  It is desirable to consider the position in relation to each of the three issues separately. 

Forced Redeployment

25                  In relation to issue (i), that is, forced redeployment, counsel for Australia Post contend this is covered by the RRR agreement which is still in place.  The RRR agreement deals in some detail with situations of redundancy, including making provision for redeployment of workers no longer required in their existing positions.

26                  However, Mr Reitano says the RRR agreement is irrelevant.  He says that, the nominal expiry date of the RRR agreement having passed, s 170MN(1) does not preclude claims in relation to matters covered by that agreement.  He argues there is a distinction in the legislation between the question whether an agreement remains in force, as the RRR agreement clearly does, and whether it is an agreement which precludes action under
s 170MN.

27                  In response to this argument, counsel for Australia Post referred to cl 5.2 of the certified agreement.  This clause reads as follows:

‘Post recognises that employment security is one of the general characteristics of high performance organisations.  Post remains confident that with consultation and co-operation on staffing strategies (including where necessary application of the Redeployment, Retraining, Redundancy Agreement), the change program can be managed without resort to involuntary retrenchment consistent with clause 5.1. Post will continue its commitment to provide employment security to the fullest extent practicable.’

28                  The argument put on behalf of Australia Post is that this paragraph assumes the continued operation of the RRR agreement and, in effect, incorporates its terms into the certified agreement.  It follows, so the argument runs, that, whilst the certified agreement continues in force, so does the RRR agreement; not merely pursuant to s 170LX of the Act, but as part of the certified agreement.  Accordingly, it is said, no protected action may be taken in respect of a matter which is covered by the RRR agreement.

29                  I cannot accept this argument.  It seems to me that cl 5.2 of the certified agreement does not go so far as is needed for counsels’ argument to be valid.  Clause 5.2 does not contain any agreement, on any matter, between the parties.  It is really only a statement of attitudes by Australia Post.  The first sentence of the clause contains a statement that Australia Post recognises something, namely that employment security is one of the general characteristics of high performance organisations.  The second sentence is a statement of confidence by Australia Post that, with consultation and cooperation, including, where necessary, application of the RRR agreement, the change program can be managed without resort to involuntary retrenchment.  The third sentence is a statement of intent to continue to provide employment security to the fullest extent practicable.

30                  There is nothing in this clause which makes the terms of the RRR agreement part of the terms of the certified agreement itself.  No doubt it is correct to say, as counsel argued, that the parties envisaged the continued operation of the RRR agreement.  They would have done this correctly, because of the terms of s 170LX of the Act.  However, it is one thing to recognise that a particular agreement exists; it is another thing to say it is part of the certified agreement upon which reliance is placed for an argument depending on s 170MN.  Accordingly, I reject the argument of Australia Post in respect of the first issue.

Loss of special allowance

31                  The second issue concerns the payment of compensation to certain staff who have hitherto received an allowance because of their special responsibilities in connection with parcels.  In the course of his oral evidence today, Mr Rogan made it clear that these people are not able to be distinguished by their classification under the award.  Not all the people who receive the special allowance are in the same classification.  Perhaps more importantly, not all the people in a particular classification receive the allowance.  Apparently, the allowance is paid to selected employees who undertake special responsibilities, in particular, driving duties.

32                  Australia Post relies on cl 9.1 of the RRR agreement for its contention that this matter is covered by the certified agreement.  The argument, of course, immediately runs into the difficulty I have mentioned in connection with the first issue; but even if it did not, it seems to me there would be a problem about the argument.  Clause 9.1 is concerned with changes of classification, not changes of duties or allowances.  In order to make that point, it is necessary only to set out the terms of that subclause, without worrying about the subsidiary subclauses.  Clause 9.1 states:

‘The salary of an employee who is identified as surplus to requirements and who does not elect to accept voluntary retrenchment shall be maintained at the level prescribed for the nominal classification of that employee for at least two years from the date of formal notice that the employee is surplus to requirements.  An individual review will take place of any excess staff who have been received [sic] salary maintenance for two years.  No redeployee however will have his/her salary maintenance ceased unless he/she has refused a reasonable opportunity for placement at their nominal level.’

33                  As I understand the purpose of this subclause, it is to cover a case where a person is redeployed into a classification bearing a lower salary than the classification which the employee previously had.  The scheme of the clause is to allow the salary attached to the earlier classification to continue for two years, notwithstanding the reclassification.  It seems to me that the clause has nothing to do with a case where a person's classification remains the same but he or she is relieved of particular duties and/or loses a particular allowance.  Accordingly, it seems to me the argument on this second issue also fails.

Use of part-time employees

34                  The third issue concerns the possible use of part-time employees at some of the proposed parcel centres.  Counsel for Australia Post argue that this matter is covered by cl 6 of the certified agreement.  The relevant parts of that clause read as follows:

‘6.1   Australia Post’s staffing resources at facility level will continue to comprise predominantly permanent staff (full and part-time) with a fair and reasonable utilisation of overtime and extended hours for business fluctuations above required staff establishment levels.

6.2     Australia Post recognises the value of its permanent workforce and is committed, all other things being equal, to providing full-time permanent employment as the preferred option.

6.3       Where there is an on-going need that cannot be filled in this way the preferred option is permanent part-time work.

6.4        Full-time positions would only be considered for part-time where there is a genuine need for such change:

·     positions would not be split unless there were sound business reasons (or under specifically agreed job sharing arrangements) and would normally only occur when the positions are vacant.’

35                  This clause, which is contained in the certified agreement itself, directs attention to the issue of full-time versus part-time employment.  However, Mr Reitano argues that nothing in the clause constitutes an agreement as to the terms and conditions of employment.  He says the clause is really only a statement of objectives or principles; accordingly, it does not come within the concept of terms and conditions of employment that was identified by French and von Doussa JJ in Australian Industry Group as being the subject matter of
s 170MN(1) of the Act.

36                  I agree with this submission.  I do so, particularly because I think the principle stated by Ryan J in Kilpatrick Green ought to be applied.  It must be remembered that the effect of
s 170MN(1) is to preclude a party from taking industrial action - even industrial action which is ‘protected action’ under the Act, with the constraints that thereby apply - for the duration of a certified agreement.  I think a party should be regarded as deprived of the right to take such action only where it is clear that the subject matter of the dispute is resolved by a term of the relevant certified agreement.  As Ryan J expressed it, deprivation of such a right should occur ‘only if the language they have chosen intractably dictates such a construction’.

37                  In the present case, it will be noted, the certified agreement contains no agreement as to the use of part-time employees.  Clause 6 contains statements of objectives and principles, but that is all.  The problem is not simply that cl 6.1 fails specifically to address reorganisation of the parcel network; it contains no agreement at all.

38                  Even if I were wrong in relation to my primary approach to this issue, Australia Post would confront the difficulty of the reservation, in cl 23(4) of the certified agreement, of ‘parcel structure’.  I cannot accept the submission put on behalf of Australia Post, arising out of some oral evidence of Mr Rogan, that this reservation is confined to the matter of reclassification of employees.

39                  It seems to be clear that, in 2001, the parties were negotiating a new certified agreement against the backdrop of a proposal by Australia Post to carry out a major reorganisation of its parcels operations.  Very sensibly, they did not try to anticipate the workplace relations issues that would be caused by the reorganisation.  They simply put the subject aside, by an express reservation.  The explanatory note makes clear that they were putting aside the whole subject.  It would be inconsistent with this approach for me to hold, as Australia Post invites me to do, that, by the general words of cl 6.1 of the certified agreement, the CEPU is precluded from raising an issue in relation to the ratio of full-time to part-time employment in the new operations which arise out of reorganisation of the parcel network.  Australia Post fails in respect of the third issue.

Disposition

40                  I have dealt with the issues in some detail because of the urgency of the case.  Counsel went further than to debate whether or not there is a serious question to be tried.  With the assistance furnished to me by counsels' submissions, I am satisfied that there is no serious question to be tried.  Section 170MN of the Act does not preclude industrial action in respect of any of the matters in dispute.  It is not necessary for me to consider the question of balance of convenience.  The appropriate order is that the application for an interlocutory injunction be dismissed.

41                  The principal action, of course, remains in existence - at least for the moment.  Subject to any view of counsel, I propose to stand it over for directions at 9.30 am on Tuesday, 16 December 2003.

Associate:

Date:                22 December 2003