FEDERAL COURT OF AUSTRALIA

 

Wesfarmers Premier Coal Limited v The Automotive Food Metals

Engineering, Printing and Kindred Industries Union (No 2) [2004] FCA 1737

 

INDUSTRIAL LAW – industrial action – whether protected action – to support or advance claims in respect of a proposed certified agreement – meaning of ‘proposed agreement’ – how proposed agreement identified – whether proposed agreement deals only with matters pertaining to employer-employee relationship – test for whether matter pertains to employer-employee relationship – provision limiting application of proposed agreement – provision for subsequent agreement in respect of possible new plant – paid leave for attendance at union meetings and training courses – - payment for attendance by off duty employees - utilisation of independent contractors – right of entry of union representatives – redundancy entitlements – leave for local government representation – provisions relating to payment for off duty employees and utilisation of independent contractors not pertaining to employment relationship - proposed agreement not certifiable – industrial action not protected – whether any penalty appropriate.

 

Workplace Relations Act 1996 (Cth) s 170LI, s 170MI, s 170MJ, s 170ML, s 170MO, s 170MP, s 170MT, s 170NC

Industrial Relations Act 1979 (WA)

Coal Industry Tribunal of Western Australia Act 1992 (WA)

Workplace Relations Amendment (Agreement Validation) Act 2004 s 170NHBA, s 170NHC

Conciliation and Arbitration Act 1904 (Cth)

 

Electrolux Home Products Pty Ltd v Australian Workers’ Union and Others (2004) 209 ALR 116 applied

Electrolux Home Products Pty Ltd v Australian Workers’ Union [2001] FCA 1600 cited

Grain Elevators Board (Vic) v Dunmunkle Corporation (1946) 73 CLR 70 cited

R v Portus; Ex parte ANZ Banking Group Ltd (1972) 127 CLR 353 cited

R v Kelly; Ex parte Victoria (1950) 81 CLR 64 cited

AMIEU v G & K O’Connor Pty Ltd (1999) IR 355 cited

R v Commonwealth Court of Conciliation and Arbitration and the Merchant Service Guild of Australia; Ex parte Allen Taylor & Company Ltd (1912) 15 CLR 586 cited

R v Industrial Commission (SA); Ex parte Fire Brigade Board (1977) 15 SASR 546 cited

Robe River Iron Associates v Amalgamated Metal Workers and Shipwrights Union of Australia (1987) 19 IR 112 cited

R v The Judges of the Commonwealth Industrial Court; Ex parte Cocks (1968) 121 CLR 313 cited

R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470 cited

Construction, Forestry, Mining & Energy Union v Mount Thorley Operations Pty Ltd (1997) 79 FCR 97 cited

 

Pearce and Geddes, ‘Statutory Interpretation in Australia’, 5^th Edition (Butterworths 2001)

WESFARMERS PREMIER COAL LIMITED v THE AUTOMOTIVE FOOD METALS ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION

W230 OF 2004

 

FRENCH J

23 DECEMBER 2004

PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W230 OF 2004

 

BETWEEN:	WESFARMERS PREMIER COAL LIMITED APPLICANT
AND:	THE AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION FIRST RESPONDENT   JOHN KILDAY FERGUSON SECOND RESPONDENT   COLIN GEOFFREY SAUNDERS THIRD RESPONDENT   LUKE EDMONDS FOURTH RESPONDENT   JOHN LESLIE KEARNEY FIFTH RESPONDENT   WAYNE THOMAS WAYWOOD SIXTH RESPONDENT   ANTHONY BRUCE KENT SEVENTH RESPONDENT   WAYNE ROBERT SANFORD EIGHTH RESPONDENT   THE AUTOMOTIVE FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION – WESTERN AUSTRALIA NINTH RESPONDENT   THE AUSTRALIAN COUNCIL OF TRADE UNIONS INTERVENOR   MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS INTERVENOR
JUDGE:	FRENCH J
DATE OF ORDER:	23 DECEMBER 2004
WHERE MADE:	PERTH

 

 

IT IS HEREBY DECLARED THAT:

 

1(a)      The industrial action that the first, second, third and fourth respondents engaged in pursuant to a Notice of Intention to take Industrial Action dated 1 October 2004 and issued by the first respondent to the applicant was not protected action within the meaning of section 170ML of the Workplace Relations Act 1996 (Cth).

 

(b)        The industrial action that the first, second, third and fourth respondents engaged in pursuant to a Notice of Intention to take Industrial Action dated 1 October 2004 was in contravention of section 170NC of the Workplace Relations Act.

 

IT IS HEREBY ORDERED THAT:

 

2.         The application is listed for directions as to further relief, if any, and the assessment of damages and penalties on 11 January 2005 at 10.15am.

 

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

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W230 OF 2004

 

BETWEEN:

WESFARMERS PREMIER COAL LIMITED APPLICANT

AND:

THE AUTOMOTIVE, FOOD , METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION RESPONDENT   JOHN KILDAY FERGUSON SECOND RESPONDENT   COLIN GEOFFREY SAUNDERS THIRD RESPONDENT   LUKE EDMONDS FOURTH RESPONDENT   JOHN LESLIE KEARNEY FIFTH RESPONDENT   WAYNE THOMAS WAYWOOD SIXTH RESPONDENT   ANTHONY BRUCE KENT SIXTH RESPONDENT   ANTHONY BRUCE KENT SEVENTH RESPONDENT   WAYNE ROBERT SANFORD EIGHTH RESPONDENT   THE AUTOMOTIVE FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION – WESTERN AUSTRALIA NINTH RESPONDENT   THE AUSTRALIAN COUNCIL OF TRADE UNIONS INTERVENOR   MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS INTERVENOR

 

JUDGE:	FRENCH J
DATE:	23 DECEMBER 2004
PLACE:	PERTH

REASONS FOR JUDGMENT

 

Introduction

1                     In July and October 2004, maintenance workers employed by Wesfarmers Premier Coal Ltd (Premier Coal) at its Collie coal mine went on strike.  The July strike lasted for five days from 17 to 22 July 2004.  The October strike also lasted for five days from 6 to 11 October when the employees returned to work pursuant to orders made by this Court on 8 October 2004. 

2                     The industrial action undertaken by members of the Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union (AMWU (Cth)) reflected the breakdown of negotiations for a certified agreement between Premier Coal and the union.  The certified agreement negotiations had subsumed earlier negotiations about a possible Enterprise Agreement under State legislation relating to the coal industry.  The principal point of difference which led to the strike concerned proposed new rostering arrangements which would have put maintenance workers at the mine on the same roster as mine operators. 

3                     Premier Coal alleges that the industrial action was initiated and organised by the union and its officers in July and October 2004 and was unlawful.  It says that the strikes were not covered by the ‘protected action’ provisions of the Workplace Relations Act 1996 (Cth).  It says that a proposed agreement which had been partly negotiated to that point, contained provisions which did not pertain to the employer-employee relationship and which would mean that the agreement could not ultimately be certified.

4                     It is a consequence of the recent decision of the High Court in Electrolux Home Products Pty Ltd v Australian Workers’ Union and Others (2004) 209 ALR 116 that industrial action taken in relation to a proposed agreement which is not capable of certification is not protected under the provisions of the Workplace Relations Act.

5                     For the reasons that follow, I am satisfied that the strike action undertaken in July was protected action by virtue of very recent validating legislation passed in the wake of the Electrolux decision.  The October strike however, was not covered by that amending legislation and, in my opinion, was not protected action.  I make declarations accordingly and stand over the questions of damages and penalties for later hearing and determination.

6                     There is a degree of technicality in this result.  Premier Coal based its attack upon the lawfulness of the industrial action taken by the union and its officers upon clauses in a proposed draft agreement which it had itself provisionally agreed to in negotiations with the union and its representatives.  The matter over which the October strike occurred was a matter clearly relating to employer-employee relationships, namely rostering arrangements.  That was not a matter upon which Premier Coal could or did rely to impugn the lawfulness of the industrial action.  This is a circumstance which, in my opinion, will be relevant to the question whether any, and if so what, penalty should be imposed in this case.

Factual and Procedural Background

7                     Premier Coal operates a coal mine at Collie in the State of Western Australia.  It employs approximately 138 permanent mine operators and 63 permanent maintenance employees.  The mine operators belong to the Coal Mines Union (CMU), a branch of the Construction, Forestry, Mining and Energy Union (CFMEU).  The maintenance workers are all members of the Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union (AMWU (Cth)) which is registered under the Workplace Relations Act 1996.  The maintenance workers are also members of the State Branch of that organisation which is registered under the Industrial Relations Act 1979  (WA). It is the ninth respondent and will be referred to as the AMWU-WA.

8                      The terms and conditions of employment of the maintenance workers and the mine operators are currently contained in two separate State-registered enterprise agreements, being the Enterprise Agreement (Maintenance) 2001 and the Enterprise Agreement (Operations) 2001-2004.  The parties to the Enterprise Agreement (Maintenance) are Premier Coal and the AMWU-WA.  The agreements are both registered under the Coal Industry Tribunal of Western Australia Act 1992 (WA) (the CIT Act).  The Enterprise Agreement (Maintenance) nominally expired on 10 January 2004 and the Enterprise Agreement (Operations) on 14 September 2004.  Both continue to operate pursuant to the terms of the CIT Act.   Hitherto industrial relations on the site have been regulated under State law and through the Coal Industry Tribunal (CIT). 

9                     In August 2003, Premier Coal commenced negotiations with the CMU and the AMWU-WA for a new Enterprise Agreement.  Its management had in mind a single Enterprise Agreement with both unions.  The company wanted its maintenance employees and mine operators to have one standard set of conditions.  It felt this would improve teamwork, reduce costs and eliminate confusion and complications in managing employees under two separate sets of conditions.  An initial negotiating meeting was held on or about 31 July 2003. 

10                  In August 2003, negotiations began for a new Enterprise Agreement and continued in September, October and November.  Premier Coal was represented at various of the meetings and conferences by its Managing Director, Stewart Butel, the Maintenance Manager, Jeff Allen, and the General Manager-Operations, Patrick Warrand, among others.  The AMWU-WA was represented variously by the following persons who held offices in it and in the AMWU (Cth).  They were:

1.         Colin Saunders, the State President of the AMWU-WA and the Western Australian State Branch of the AMWU (Cth)

2.         Jock  Ferguson, the State Secretary of the AMWU-WA and the Western Australian State Branch of the AMWU (Cth).

3.         Luke Edmonds, the Industrial Officer employed by the AMWU-WA and the Western Australian State Branch of the AMWU (Cth).

4.         John Kearney, a Shop Steward for the AMWU (Cth) and the AMWU-WA.  He is employed by Premier Coal as a maintenance worker. 

5.         Wayne Waywood who is a Shop Steward for the AMWU (Cth) and the AMWU-WA and is employed by Premier Coal as a maintenance worker.

6.         Anthony Kent, a Shop Steward for the AMWU (Cth) and the AMWU-WA and is employed by Premier Coal as a maintenance worker.

7.         Wayne Sanford who is a Shop Steward for the AMWU (Cth) and the AMWU-WA and is employed by Premier Coal as a maintenance worker.

11                  At the first meeting between the parties on 13 August 2003 Sally Cawley, a former Commissioner of the Western Australian Industrial Relations Commission, acted as a facilitator.  It was agreed by all present that, although there would be discussions about various claims, nothing would be agreed until everything was agreed.  This protocol was included in a negotiating document entitled ‘Parties Understandings Re Negotiations’.  This protocol remained in force throughout all the negotiations, including negotiations relating to a certified agreement under the Workplace Relations Act which subsumed the negotiations about a State-based Enterprise Agreement.

12                  The path of negotiation was not smooth.  On 24-25 November 2003, mining operators and maintenance workers went on strike.  A conference was held in the CIT on 3 December 2003.  Negotiations resumed on 5, 10-11 and 17 December 2003.  Another CIT conference took place on 18 December and further negotiations on 19, 23 and 24 December and 19, 23 and 27 January 2004 and 2 February 2004.  A second strike occurred between 3 and 6 February 2004.  Another conference was held in the CIT on 3 February and more negotiations on 4, 5, 9, 11-13, 16, 25-27 February, 2, 3 and 5 March 2004.  CIT conferences were convened on 5, 10 and 17 February, 12 March, 14, 16 and 21 April 2004.  A 36 hour strike by members of the CMU and the AMWU-WA commenced on 22 April 2004.  A major point of difficulty in the negotiations was the desire by Premier Coal that all its employees, both mining operators and maintenance workers, should work on the same roster.  This proposal was not accepted by the AMWU-WA and its members. 

13                  On 27 April 2004, the parties attended a conference before Chairman Kenner of the CIT in Collie.  In the course of the conference Premier Coal advised that it intended to apply for the dispute to be arbitrated by the CIT.  At the same conference Colin Saunders, the State President of the AMWU (Cth) as well as of the AMWU-WA announced that the Federal union had filed a ‘Notice of Initiation of Bargaining Period’ with the Australian Industrial Relations Commission.  The parties agreed to continue negotiations on 29 April 2004 and did so but no agreement was reached.  On that day Premier Coal received a copy of the Notice issued by the AMWU (Cth) pursuant to the Workplace Relations Act. 

14                  The relevant parts of the Notice were in the following terms:

‘WORKPLACE RELATIONS ACT 1996

AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

NOTICE OF INITIATION OF BARGAINING PERIOD

Under subsection 170MI(2) of the Act NOTICE IS HEREBY given to the Australian Industrial Relations Commission that the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, of 133 Parramatta Road, Granville, New South Wales 2142 (“AMWU”), an organisation of employees intends to try:

(a)       to make an agreement under Division 2 of Part VIB of the Act with Wesfarmers Premier Coal Limited, Premier Road, Collie for all employees who are members of the AMWU employed in the companies (sic) operations in Collie (“Employer”);

            and

(b)       to have an agreement so reached certified under Division 4 of Part VIB of the Act.

Particulars as specified in section 170MJ of the Act are:

1.         The single business to be covered by the agreement are the operations of the company in Collie.

2.         (a)        The types of employees to be covered by the agreement are all employees who are members of the AMWU employed in Collie.

            (b)        The proposed parties to the agreement are:

                        (i)         Wesfarmers Premier Coal Ltd.

                       (ii)        Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union

3.         The matters that should be dealt with in the agreement are as follows:

In addition to the current wages and conditions applying in the workplace, the following:....’

There then followed a list of some 35 items which took the form of proposed matters to be dealt with in the agreement.  These included a global increase of 20% per annum in wages and allowances, a personal leave entitlement of at least 15 days per annum cumulative, an employer superannuation contribution of at least 15%, 52 weeks paid parental leave etc.  In addition, and relevantly to the matters in dispute in the present case, the list included the following:

1.         Ten days paid trade union training leave.

2.         Comprehensive right of entry provisions for AMWU officials and other persons approved by the AMWU.

3.         Rights for AMWU shop stewards to conduct union business.

4.         Agreement on the use of contract labour.

5.         Conversion of casuals and contract labour to permanent after six months employment.

6.         No employees to be engaged on individual contracts and/or Australian Workplace Agreements.

7.         Blood donor’s leave.

8.         Paid leave to attend union meetings.

At the end of the notice it was stated:

‘The proposed nominal expiry date of the agreement is the March 31 2006.

The Commission is not being asked to exercise powers to try by conciliation to facilitate the making of such agreement.’

The notice was dated 27 April 2004.   Premier Coal wrote to the unions on 30 April 2004 acknowledging that it had received the Initiation of Bargaining Period Notice. 

15                  Further negotiations took place on 4 May 2004 in relation to the Enterprise Agreement.  On 10 May 2004, Mr Luke Edmonds an Industrial Officer of the AMWU, sent a letter to Premier Coal referring to the Notice of Initiation of Bargaining Period and stating, inter alia:

‘We confirm that following further consultation with the workforce and discussions with Wesfarmers Premier Coal Ltd we have been able to refine the claims to be made against the Company.  Please find enclosed document headed “Amended Log of Claims” which reflects that refined position.’

The letter confirmed the AMWU’s commitment to reaching ‘a mutually beneficial agreement with Wesfarmers Premier Coal’.  Mr Edmonds sought an urgent meeting with the company to discuss the issues outlined in the log of claims. 

16                  The amended log of claims attached to the letter of 10 May 2004, like its predecessor of 27 April, contained references to trade union training leave, right of entry provisions, rights for shop stewards to conduct union business, conversion of casuals and contract labour to permanent, blood donor’s leave, paid leave to attend consultation on future enterprise agreement and paid leave to attend union meetings. 

17                  Mr Warrand responded to Mr Edmonds on 11 May 2004 advising that Premier Coal had not had any discussions with the union regarding the log of claims attached to the notice of 29 April 2004 or the amended log of claims or about any matter which could be included in a certified agreement under the Workplace Relations Act.  Premier Coal wanted clarification of a number of matters in the amended log of claims before it would be in a position to commence meaningful negotiations.  It wanted written clarification of those matters as soon as possible.

18                  On 19 May 2004, Mr Warrand received a facsimile from Colin Saunders, on behalf of the AMWU (Cth).  Mr Saunders said he was able to make himself available to clarify the claims on 20 or 21 May 2004.   Mr Warrand replied that he would be available on 26 May 2004 and repeated his request for written clarification of the matters set out in his facsimile to Mr Edmonds.  A meeting was set up for 26 May 2004 and Mr Saunders said he would provide full details of the amended log of claims during that meeting.  Mr Warrand replied on 24 May indicating that without written clarification of the matters set out in his facsimile to Mr Edmonds, Premier Coal could not commence negotiations but, as an act of good faith, would attend the meeting for the purpose of giving the AMWU (Cth) an opportunity to clarify the matters.  In the meantime, on 20 May, Premier Coal made application to the CIT for the dispute between Premier Coal, the CMU and the AMWU-WA to be arbitrated by the CIT.  A proposed award was attached to the application which would cover both maintenance and mining employees.  According to Mr Allen Premier Coal made the application because the parties had been negotiating for nine months and had been unable to reach an agreement.  Despite the lodgment of the application, he said, Premier Coal continued to negotiate for a new Enterprise Agreement.

19                  Mr Warrand attended the meeting of 26 May 2004 with Messrs Bradshaw, Reynolds, Bailey, Allen and Bull of Premier Coal.  Messrs Saunders, Edmonds, Kearney, Kent, Waywood and Sanford attended on behalf of the AMWU (Cth).  The AMWU (Cth) did clarify points raised in the log of claims.  However no negotiations commenced during the meeting.  The AMWU (Cth) agreed to provide Premier Coal with draft clauses for some of the items in the amended log of claims.  It did this on 27 May 2004.   Mr Warrand wrote to Mr Saunders on 1 June 2004 confirming that Premier Coal was reviewing the amended log of claims, the clarification which had been provided and draft clauses.  He said Premier Coal would provide its response in about two weeks.

20                  The negotiations relating to the State-based Enterprise Agreement went on between Premier Coal, the CMU and the AMWU-WA on a number of occasions, including 2, 9, 21 and 22 June and 14 July.  They led to draft Enterprise Agreements being prepared by Premier Coal and provided to the CMU and the AMWU-WA.  The last of those drafts was provided on or about 9 July 2004. 

21                  In the meantime, on 16 June 2004, Mr Warrand wrote to Mr Saunders attaching Premier Coal’s response to the amended log of claims in the bargaining process initiated under the Commonwealth Act.  He informed Mr Saunders that Premier Coal was preparing its own log of claims to ensure that all issues in dispute were identified and that he anticipated that log of claims would be provided within the next fortnight.  He also said that Premier Coal was willing to meet with the AMWU (Cth) to discuss the detail of the log of claims if required.  The Premier Coal log of claims was sent to Mr Saunders on 9 July 2004.   It contained no reference to right of entry provisions, rights of AMWU (Cth) shop stewards, parental leave, blood donor’s leave, leave to attend union meetings nor any commitment to reach agreement on the use of contract labour or to convert casuals and contract labour to permanent after six months employment.

22                  On 12 July 2004, Gary Wood writing on behalf of the CFMEU and therefore, I infer, on behalf of the CMU, asked for the deletion of any reference in the Enterprise Agreement to a proposed Char Plant.  He wrote:

‘... we may well be arguing over a non-event.’

In so saying he made it clear that the issues raised in his memorandum were not raised on behalf of the AMWU-WA as there had been no joint discussion between the unions at that stage.  Premier Coal responded on the same day.  It did not agree with the request to delete reference to the Char Plant from the agreement.  It said:

‘The Scope and Parties Bound clause (clause 2) clearly sets out Premier Coal’s intention that work performed on the Char Plant will not be subject to this Agreement.’

 

23                  On 13 July 2004, Premier Coal attended a conference at the CIT with the CMU and the AMWU-WA in respect of the Enterprise Agreement.  In the course of that conference Mr Edmonds, acting on behalf of the AMWU (Cth), handed Mr Warrand an envelope which contained a letter headed ‘Notice of Intended Industrial Action’.  That letter was in the following terms:

‘NOTICE OF INTENDED INDUSTRIAL ACTION

 

In accordance with section 170MO of the Workplace Relations Act 1996, The Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union of Workers, Western Australian Branch (AMWU) gives notice of its intention to take industrial action with respect to the operations of WESFARMERS PREMIER COAL at the WESFARMERS PREMIER MINE on PREMIER ROAD, COLLIE in the State of Western Australia.

The nature of the intended action and the day of the action is as follows:

            A stoppage of work commencing on Saturday 17 July 2004 and continuing for 4 weeks.’

 

The notice was dated 13 July 2004 and signed by Mr Saunders as State President of the WA Branch of the Federal union.

24                  On 14 July 2004, Premier Coal instructed its lawyers to write to Mr Saunders notifying the AMWU (Cth) that as it had not genuinely tried to reach agreement with Premier Coal industrial action taken on Saturday, 17 July 2004 as foreshadowed would not be protected action and would be unlawful.  On 14 July 2004, Mr Warrand went on annual leave.

25                  On 16 July 2004, Premier Coal lodged an application with the Australian Industrial Relations Commission (AIRC) under s 127 of the Workplace Relations Act seeking orders that the AMWU (Cth) and its members cease taking industrial action on the basis that their action was not protected action under the Act.  That application was heard in the AIRC on 16, 19 and 20 July 2004.  In the meantime on 17 July 2004 the AMWU (Cth) members had commenced industrial action at the mine site.  Its effect was that only limited maintenance work was able to be performed on the mining equipment.  Premier Coal has 15 trades apprentices who did not go on strike but the amount and nature of the maintenance work they were able to perform was limited.  At the time Premier Coal had a substantial backlog of maintenance work and equipment unavailability.

26                  At the conclusion of the hearing on 20 July Deputy President McCarthy refused to issue s 127 orders and stated he would not make any finding on whether the action was protected.  This was evidently on the basis that it was not the AIRC’s role to do so.  He issued a recommendation, however, that the AMWU (Cth) and its members cease their industrial action immediately and return to work.  The maintenance workers went back to work on 22 July 2004.  The length of the strike action in July was accepted by Mr Allen in his affidavit of 29 October 2004 as a period of five days from 17 to 22 July 2004. 

27                  On 22 July a meeting was held between Premier Coal and the AMWU (Cth) in relation to the first Notice of Initiation of Bargaining Period.  Premier Coal was represented by Messrs. Butel, Reynolds, Bradshaw, Bailey and Allen.  The AMWU (Cth) was represented by Messrs Saunders, Kearney, Waywood, Kent and Sanford.  According to Mr Allen, the discussions proceeded by reference to clauses in the draft Enterprise Agreement.  They continued on 23 July in relation to the form and content of the draft certified agreement.  As appears from the evidence of Mr Allen in cross-examination, which I accept, the negotiations were based upon a revision of the most recent draft Enterprise Agreement of 9 July adapted to provide a draft certified agreement by substituting the words ‘Certified Agreement’ for ‘Enterprise Agreement’ and deleting references to the CMU.  This was confirmed by Mr Saunders in cross-examination also.

28                  A further draft dated 26 July was prepared based on the Enterprise Agreement of 9 July.  This was exhibited as PW19 to Mr Warrand’s affidavit of 6 October 2004. 

29                  Mr Saunders described the progress of negotiations that followed in general terms in his cross-examination.  The negotiations at the meeting of 22 July went through the modified draft Enterprise Agreement.  The negotiating process that followed involved, over the successive weeks, the progressive amendment of the draft as clauses were agreed.  The general principle of ‘nothing was agreed until everything was agreed’ originally adopted evidently continued.

30                  Negotiations continued through August.  Drafts were prepared dated 30 August 2004 and 31 August 2004 which were exhibited to Mr Warrand’s affidavit sworn 29 October.  Mr Saunders could not recall seeing the draft of 31 August.  The last draft he saw was that dated 30 August 2004 which was exhibited as PW26 to Mr Warrand’s affidavit of 29 October.  I accept nevertheless that, as Mr Warrand deposed, the last draft Certified Agreement was that dated 31 August 2004. 

31                  On 30 August 2004, a meeting of maintenance workers employed by Premier Coal resolved:

‘This meeting of employees makes clear that the roster which we work currently is the SIMCOA roster and that we will continue to work that shift roster.  In response to the proposition of Premier Coal to work the miners’ roster, we would, in order to break the deadlock in relation to this issue, provide the employer with an option for a trial period, of combination rosters.  If rejected, we request the union to give three days’ notice of a strike of one month’s duration.’

 

32                  Mr Saunders informed Mr Warrand on 31 August 2004 of the resolution passed at the members’ meeting the previous day and told him that the members had decided that if there were no movement on the roster they would undertake industrial action.  It may be noted that at this stage, although the roster appears to have been the sticking point, neither wages nor the treatment of accumulated leave had been resolved, even on a provisional basis.  Mr Warrand asked Mr Saunders for three weeks within which to reply to the ultimatum about the roster.  Mr Saunders agreed and after he reported back to his members they scheduled a further meeting of the maintenance workers for 21 September 2004. 

33                  There were further meetings in September.  A meeting, at which both Mr Allen and Mr Warrand were present, took place on 15 September 2004 at the Mercure Hotel in Perth. There was a discussion at that meeting of the decision of the High Court in Electrolux which had been delivered on 2 September 2004.  Mr Saunders made a comment to the effect of ‘we will take every case on, even if necessary to the High Court’.  There was discussion of clauses which might ‘offend’ the Electrolux decision.  One such clause raised by Mr Butel was that relating to the use of contractors by the company.

34                  On 21 September 2004, Mr Saunders reported to a meeting of the maintenance workers that the Electrolux decision might have an impact on what could or could not be included in a certified agreement and what could be the subject of protected industrial action under the Workplace Relations Act.  He indicated to his members that the union was seeking advice on the question.

35                  On 22 September 2004, Mr Warrand and Mr Butel met with Messrs. Kearney, Waywood, Sanford and Kent for the AMWU (Cth) and were told that the union rejected the company proposal on the roster.  The AMWU (Cth) representatives informed Messrs Butel and Warrand that the members had decided to take industrial action.  They also said that they would shortly issue a fresh Notice of Initiation of Bargaining Period relating to the unresolved roster question and the pay issue and a notice of intended industrial action foreshadowing a strike of one month’s duration.  Mr Warrand said that the company was prepared to continue negotiations but the AMWU (Cth) representatives did not think there was any point in doing so.

36                  On 28 September 2004, Mr Warrand received, by facsimile, a fresh Notice of Initiation of Bargaining Period.  The Notice, which followed the form of its predecessor, specified as ‘the matters that should be dealt with in the agreement’:

‘In addition to the general wages and conditions applying in the Metals Trade General Award No 13 of 1965 and in addition to those matters already agreed between the parties the following:

1.         Rosters

2.         Pay Increases

3.         Sick Leave

4.         Annual Leave Numbers

5.         Public Holidays’

 

37                  On the afternoon of 1 October 2004, Premier Coal received, by facsimile, a Notice of Intended Industrial Action from the AMWU (Cth) in the following terms:

‘NOTICE OF INTENDED INDUSTRIAL ACTION

In accordance with section 170MO of the Workplace Relations Act 1996, The Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union of Workers (“the AMWU”) gives notice of its intention to take industrial action with respect to the employers (sic) operations at Collie in the state (sic) of Western Australia.

The nature of the intended action and the day of the action is as follows:

            A stoppage of all work beginning at 7am on Wednesday 6^th October 2004 and continuing until Saturday 6^th November 2004.

 

Perth, the 1^st day of October 2004

(signature)

Colin Saunders

State President’

On the same day Premier Coal’s solicitors responded by sending a letter to Mr Saunders advising that the proposed industrial action would not be protected action and that if it were undertaken the company would institute proceedings on an urgent basis seeking injunctions, damages and penalties. 

38                  On 5 October 2004, Mr Warrand and Mr Allen spoke by telephone with Mr Kearney.  They discussed the letter from Clayton Utz.  Mr Kearney said that he had received a copy of the letter from Mr Edmonds.  He said that the AMWU (Cth) members were going on strike despite the letter.  Even if Premier Coal won any legal battle there would still be no agreement.  He would not be surprised if Premier Coal did not have a crack at the union in court.

39                  Industrial action was commenced by way of a strike of the maintenance workers on 6 October 2004.  On that day Premier Coal instituted these proceedings.  The company sought interlocutory relief and on 8 October 2004 interlocutory orders were made which had the effect of requiring a return to work.

40                  The maintenance workers returned to work pursuant to the interlocutory injunction and the application proceeded to hearing on 4, 5 and 11 November 2004 substantially on the question of the legality of the industrial action.  This was reflected in an order made on 13 October 2004 in the following terms:

‘The Court shall proceed to hear and determine ... the Applicant’s claim for a declaration that:

(a)       The industrial action of the Respondents on 17 July 2004 to 25 July 2004 being action threatened in a notice by the First Respondent dated 13 July 2004; and

(b)       The industrial action of the Respondents on 6 October 2004 to 11 October 2004 being action threatened in a notice by the First Respondent dated 1 October 2004:

was, in each case:

(c)        Not protected action within the terms of s170ML of the Act; and

(d)       Breached s170NC(1) of that Act.’

A further order was made that the proceedings as to damages and penalties and any other aspects of the application would be adjourned to a date to be fixed following the hearing and determination of the application for a declaration.  Subsequently and prior to the hearing of the application, the Minister intervened as of right and the ACTU by leave.

 

The Relief Claimed

41                  The declaratory relief claimed by Premier Coal in its further amended application filed 15 October 2004 is in the following terms:

‘1.        Declarations that:

            (a)        The industrial action that the Respondents engaged in from 17 July 2004 to 25 July 2004 pursuant to the Notice of Intention to take Industrial Action dated 14 July 2004 and issued by the First Respondent to the Applicant (“the First Notice”) is not protected action within the meaning of section 170ML of WR Act;

            (b)        the industrial action that the Respondents are engaging in pursuant to the Notice of Intention to take Industrial Action dated 1 October 2004 and issued by the First Respondent to the Applicant (“the Second Notice”) is not protected action within the meaning of section 170ML of WR Act;

            (c)        the industrial action that the Respondents engaged in pursuant to the First Notice and the Second Notice is in contravention of section 170NC of the WR Act, by reason of it not being protected action;

            (d)        the Draft Maintenance CA of September 2004 is not:

                       (i)         an agreement about matters pertaining to the relationship between an employer and all persons who are employed in the employer’s business within the meaning of section 170LI of the WR Act; and

                       (ii)        a valid “proposed agreement” within the meaning of section 170ML of the WR Act;

            (e)        the following clauses of the Draft Maintenance CA of September  2004 are not matters pertaining to the relationship between the Applicant and all persons who are employed in the Applicant’s business within the meaning of section 170LI of the WR Act:

                       (i)         clause 3(3) regarding the Char Plant Agreement;

                       (ii)        clause 32, regarding Union Meetings;

                       (iii)       clause 33 (and Schedule C), regarding Utilisation of Contractors;

                       (iv)       clause 35, regarding Right of Entry of Union Representatives;

                       (v)        clause 36, regarding Redundancy Entitlements;

                       (vi)       clause 37, regarding Local Government Representation.

2.         Further or in the alternative to paragraph 1, declarations that:

            (a)       the Second Bargaining Period Notice is invalid by reason of it proposing for agreement between the parties, the same matters which have been, and are, the subject of negotiations between the Applicant and the Respondents pursuant to the First Bargaining Period Notice;

            (b)       The First Notice is invalid by reason of the First Respondent’s contravention of section 170MP of the Workplace Relations Act 1996 (Cth) (“the WR Act”), in that the First Respondent and/or its members did not negotiate with the Applicant between:

                       (i)         the issue of the First Bargaining Period Notice and the issue of the First Notice; or

                       (ii)        the issue of the First Bargaining Period Notice and the commencement of the industrial action on 17 July 2004;

            (c)        the Second Notice is invalid by reason of the First Respondent’s contravention of section 170MP of the Workplace Relations Act 1996 (Cth) (“the WR Act”), in that the First Respondent and/or its members have not negotiated with the Applicant since the issue of the Second Bargaining Period Notice;

            (d)       The industrial action in which the First Respondent and its members engaged, pursuant to the First Notice is not protected by reason of the First Respondent’s contravention of section 170MP of the WR Act, in that the First Respondent and/or its members did not, between the issue of the First Bargaining Period Notice and the taking of the industrial action between 17 July 2004 and 25 July 2004, genuinely try to reach agreement with the Applicant before engaging in industrial action.

            (e)        the industrial action in which the First Respondent and its members engaged, pursuant to the Second Notice is not protected by reason of the First Respondent’s contravention of section 170MP of the WR Act, in that the First Respondent and/or its members have not, since the issue of the Second Bargaining Period Notice, genuinely tried to reach agreement with the Applicant before engaging in industrial action.’

   

Statutory Framework – The Workplace Relations Act 1996

42                  Part VIB of the Workplace Relations Act 1996 (Cth) deals with certified agreements.  Section 170LI(1) defines the nature of the agreements which can be certified.  It provides:

‘[Agreement regarding relationship between parties]  For an application to be made to the Commission under this Division, there must be an agreement, in writing, about matters pertaining to the relationship between:

(a)       an employer who is a constitutional corporation or the Commonwealth; and

(b)       all persons who, at any time when the agreement is in operation, are employed in a single business, or a part of a single business, of the employer and whose employment is subject to the agreement.’

43                  Division 8 of Pt VIB is concerned with negotiations for certified agreements.  Section 170MI provides for the initiation of a bargaining period for a proposed certified agreement.  It provides, inter alia:

‘(1)      [Initiating party]  If:

(a)       an employer; or

(b)       an organisation of employees; or

(c)        an employee acting on his or her own behalf and on behalf of other employees;

wants to negotiate an agreement under Division 2 or 3 in relation to employees who are employed in a single business or a part of a single business, the employer, organisation or employee (the initiating party) may initiate a period (the bargaining period) for negotiating the proposed agreement.

(2)       The bargaining period is initiated by the initiating party giving written notice to each other negotiating party (see subsection (3)) and to the Commission stating that the initiating party intends to try:

(a)       to make an agreement with the other negotiating parties under Division 2 or 3; and

(b)       to have any agreement so made certified under Division 4.’

The negotiating parties are defined in subs 170MI(3).  They include the initiating party.  Where the initiating party is an organisation of employees they include the employer ‘who is proposed to be bound by the agreement’.  Where the initiating party is an employer they include ‘the organisation or organisations who are proposed to be bound by the agreement’.

44                  Section 170MJ sets out the particulars which are to accompany the notice of initiation of a bargaining period:

‘The notice is to be accompanied by particulars of:

(a)       the single business or part of the single business to be covered by the proposed agreement; and

(b)       the types of employees whose employment will be subject to the agreement and the other persons who will be bound by the agreement; and

(c)        the matters that the initiating party proposes should be dealt with by the agreement; and

(d)       the industrial dispute (if any) to which the proposed agreement relates; and

(e)        the proposed nominal expiry date of the agreement; and

(f)        any other matters prescribed by the regulations.’

The bargaining period begins seven days after the giving of notice (s 170MK). 

45                  Section 170ML provides for circumstances in which industrial action will enjoy legal immunity.  In those circumstances it is referred to as ‘protected action’.  The section provides:

‘(1)      [Protected action]  This section identifies certain action (protected action) to which the provisions in section 170MT (which confers certain legal immunity on protected action) are to apply.

(2)       During the bargaining period:

(a)       an organisation of employees that is a negotiating party; or

(b)       a member of such an organisation who is employed by the employer; or

(c)        an officer or employee of such an organisation acting in that capacity; or

(d)       an employee who is a negotiating party;

is entitled, for the purpose of:

(e)        supporting or advancing claims made in respect of the proposed agreement; or

(f)        responding to a lockout by the employer of employees whose employment will be subject to the agreement;

to organise or engage in industrial action directly against the employer and, if the organisation, member, officer or employee does so, the organising of, or engaging in, that industrial action is protected action.’

Subsections (3) to (6) inclusive relate to lockouts.  Subsection (7) provides that s 170ML has effect subject to the following provisions of the Division.

46                  Action to be taken pursuant to s 170ML must be the subject of prior notice.  The notice requirements are set out in s 170MO.  The content of the notice is referred to in s 170MO(5) which provides:

‘A written notice or other notification under this section must state the nature of the intended action and the day when it will begin.’

47                  There is a requirement for negotiation before industrial action.  In the case of industrial action taken by an organisation s 170MP(1) provides:

‘(1)      [Negotiation must precede action by organisation of employee]  Engaging in industrial action by a person who is a member of an organisation of employees that is a negotiating party is not protected action unless the organisation has, before the person begins to engage in the industrial action:

(a)       genuinely tried to reach agreement with the employer; and

(b)       if the Commission has made an order in relation to the negotiations – complied with the order in so far as it applies to the organisation.’

48                  Section 170MT attaches legal immunity to protected action:

‘(2)      [Protected action does not lie under any law of a State or Territory]  Subject to subsection (3), no action lies under any law (whether written or unwritten) in force in a State or Territory in respect of any industrial action that is protected action unless the industrial action has involved or is likely to involve:

(a)       personal injury; or

(b)       wilful or reckless destruction of, or damage to, property; or

(c)        the unlawful taking, keeping or use of property.’

49                  Division 9 contains provisions relating to the prohibition of coercion in relation to agreements.  Section 170NC provides:

‘A person must not:

(a)       take or threaten to take any industrial action or other action; or

(b)       refrain or threaten to refrain from taking any action;

with intent to coerce another person to agree, or not to agree, to:

(c)        making, varying or terminating, or extending the nominal expiry date of, an agreement under Division 2 or 3; or

(d)       approving any of the things mentioned in paragraph (c).’

Statutory Framework – The Workplace Relations Amendment (Agreement Validation) Bill 2004

50                  On 9 December 2004 the Workplace Relations Amendment (Agreement Validation) Bill 2004 was passed by the House of Representatives.  At a directions hearing convened on 8 December 2004, the parties were given leave to make supplementary submissions about the effect of the then pending amendment.  The object and legislative history of the Validation Act was explained in a supplementary submission from the Minister.  Its main purpose was to remove any doubt that might arise about the validity of federal workplace agreements following the decision of the High Court in Electrolux.  This purpose emerges from the Second Reading Speech where it was said:

‘The bill responds to the High Court’s recent decision in the Electrolux case that federal certified agreements must only contain clauses that pertain to the employment relationship. ...

The majority judgments in Electrolux suggest that existing agreements that contain provisions that do not pertain to the employment relationship may not be valid because the Australian Industrial Relations Commission did not have jurisdiction to certify them.  There has been some confusion among the unions and business community about the implications of this decision.

...

The bill will put parties to an agreement in the position they would have been in, had they complied with the Electrolux decision when they made or varied their agreement.’

The Bill was designed to ensure the validity of certified agreements and Australian Workplace Agreements which were asserted, approved or varied prior to the decision in Electrolux.  It provided, inter alia, that an agreement certified before 2 September 2004 containing matters that did not pertain to the employment relationship would nevertheless be valid albeit those parts of the agreement which did not pertain to the employment relationship would not be validated.

51                  The Bill was introduced into the Senate on 17 November 2004.  The Senate Employment, Workplace Relations and Education Committee conducted an inquiry.  Subsequently in the course of Senate debate the Bill was amended to include a provision validating industrial action taken prior to or on 2 September 2004 where it was taken to support or advance a claim in relation to a proposed agreement that did not pertain to the employment relationship.  The Bill, as amended in the Senate, was accepted and passed in the House of Representatives.  It is sufficient for present purposes to refer to the provision of the Act extending protected action coverage to industrial action taken prior to 2 September 2004 in respect of matters not pertaining to the employment relationship. 

52                  Section 170NHBA of the Workplace Relations Amendment (Agreement Validation) Act 2004 (Cth)provides:

‘(1)      If:

(a)       a person has organised or engaged in industrial action or locked out employees from their employment; and

(b)       the industrial action or lockout would have been protected action within the meaning of Division 8 but for the fact that it was for a purpose of, or for a purpose that included a purpose of, supporting or advancing a claim made in respect of a matter that was not a permitted matter,

then, to the extent that the industrial action or lockout occurred on or before 2 September 2004, it is taken to be protected action within the meaning of that Division.

(2)       However subsection (1) does not apply and is taken never to have applied to the extent that its application would have resulted in an acquisition of property within the meaning of par 51(xxxi) of the Constitution.’

53                  The term ‘permitted matter’ is relevantly defined in the new s 170NHC as follows:

‘Definitions of permitted matter

 

Division 2 agreements and variations

 

(1)       For the purposes of this Division, a matter is a permitted matter in relation to:

            (a)        an agreement purportedly made under Division 2 (including that Division as applied by subsection 5AA(2) or (3) or subsection 494(2); or

            (b)        a purported variation under Division of such an agreement (including an agreement to which section 170NHA applies);

            if the matter pertains to the relationship between:

            (c)        an employer; and

            (d)        all persons who, at any time when the agreement is in operation, are employed in a single business, or a part of a single business, of the employer and whose employment is subject to the agreement.’

The Nature of the Proposed Agreement referred to in the Protected Action Provisions of the Workplace Relations Act

54                  Section 170MI(1) provides, inter alia, that if an organisation of employees ‘wants to negotiate an agreement under Division 2 or 3’ then it may initiate a bargaining period ‘for negotiating the proposed agreement’.  The notice required by s 170MI(2) is a written notice that the initiating party ‘intends to try ... to make an agreement with the other negotiating parties ... and to have any agreement so made certified under Division 4’.  The notice must, by virtue of s 170MJ, be accompanied by particulars of ‘... the matters that the initiating party proposes should be dealt with by the agreement’.

55                  These provisions give content to the words ‘proposed agreement’ in s 170MI(1).  The ‘proposed agreement’ referred to in that subsection is ‘an agreement’ that the initiating party ‘wants to negotiate’.  The initiation of the bargaining period is not therefore conditioned on the existence of a draft agreement proposed by the initiating party which, if signed then and there by the negotiating parties, could be certified.  This is made clear by s 170MI(2) which contemplates an intention by the initiating party to negotiate ‘an agreement’.  That generic term allows for a variety of possibilities including that:

(a)        The initiating party has little or no idea of what the final agreement will contain but is open to a variety of outcomes.

(b)        The initiating party intends to secure an agreement containing certain terms and conditions but is open to a variety of possibilities for the balance of the agreement.

(c)        The initiating party intends to secure an agreement based on terms and conditions which it has formulated as a draft for discussion.

56                  The ‘proposed agreement’ in s 170MI(1) therefore is used in a generic sense to describe the desired outcome which is ‘an agreement’.  The requirement that the particulars accompanying the initiating notice specify the matters that the initiating party proposes should be dealt with does not demand a specification of terms and conditions but rather of topics.  Nor does it require that the matters be exhaustive of all matters that could find their way into a final agreement.  These provisions govern the beginning of a process of negotiation.  It would be antithetical to their objects to require that the initiating party have defined an agreement capable of certification from the outset.

57                  If industrial action taken by an organisation during the bargaining period is to be protected, it must be taken to ‘support or advance claims made in respect of the proposed agreement’.  Counsel for Premier Coal argued that the ‘proposed agreement’ referred to in s 170ML(2)(e) is nothing less than a draft capable, if executed, of certification under the Act.  Counsel accepted that, on his argument, neither a log of claims, nor heads of agreement, nor a partial draft with ‘blanks’ would suffice.  He relied upon the joint judgment of Gummow, Hayne and Heydon JJ in the Electrolux case.  He submitted that the legislative purpose supporting that construction was to provide certainty to the employer about the objectives of the organisation taking the industrial action.  It may be said immediately that that certainty could be achieved by an awareness on the part of the employer of the ‘claims’ which the union sought to support or advance.  It would not require the unveiling of a complete draft agreement before action was taken.

58                  The Minister’s position was the same as that of Premier Coal.  Counsel for the Minister accepted that, upon the construction she advanced, every party to negotiations would have on the table a complete document containing all the claims they wanted to advance – a log of claims incorporated, in effect, in an agreement in certifiable form.

59                  I do not accept that construction.  In my opinion, consistently with the use of the words ‘proposed agreement’ in s 170MI, the ‘proposed agreement’ in s170ML(2)(e) is the desired end point, described generically, of the negotiation process.  It does not require that there be in existence a draft of a certifiable agreement which has been prepared or is proposed by the organisation undertaking the industrial action.  On the other hand, it does not exclude the possibility that industrial action may occur at a point when such a draft has come into existence.

60                  Some aspects of the ‘proposed agreement’ from an organisation’s perspective will be identified by the particulars set out in the Notice Initiating the Bargaining Period.  In the present case the particulars accompanying the first notice took the form of a log of claims.

61                  The protection afforded to industrial action under the Act is limited by the requirement that any proposed agreement in respect of which it is brought is capable of certification under Div 2 of Pt VIE.  By s 170LI an application for certification must relate to ‘an agreement in writing about matters pertaining to the relationship between ... an employer who is a constitutional corporation ... and ... all persons who at any time when the agreement is in operation, are employed in a single business or a part of a single business of the employer and whose employment is subject to the agreement’.  The requirement that the agreement be about matters ‘pertaining to’ the employer-employee relationship means, inter alia, that industrial action is not protected if made for the purpose of supporting or advancing a claim for the inclusion in a proposed agreement terms and conditions that do not pertain to that relationship. 

62                  It is important in this, as in all cases, to have regard to the particular factual situation to which the law is being applied.  In considering the Electrolux decision, attention must be given to the facts of that case before extracting from it large propositions applicable to a variety of circumstances which were not before the Court.  As appears from the joint judgment of Gummow, Hayne and Heydon JJ at [140], the AMWU (Cth), in the course of negotiations for a Div 2 agreement ‘presented a draft on its behalf and that of the other unions’.  One of the clauses in the draft provided for the payment by employees and the collection by the employer of a Bargaining Agents Fee to be paid to the union.  Although their Honours’ judgment does not make it explicit, it was common ground before the trial judge, Merkel J, that the industrial action taken by the unions was for the purpose of supporting and advancing claims in respect of the proposed agreement.  His Honour also found that the evidence was that the unions were pursuing, inter alia, the Bargaining Agents Fee which the employer, Electrolux, regarded as non-negotiable – Electrolux Home Products Pty Ltd v Australian Workers’ Union [2001] FCA 1600.

63                  In construing s 170ML(2)(e) the joint judgment said at [152]:

‘The “proposed agreement” is identified in s 170MI(1) as that which the imitating party, in this case the unions, “wants to negotiate”, being “an agreement under Div 2 or 3”.’

Their Honours referred to the requirements for certification under Div 2.  Then at [156]:

‘In the present case, “the proposed agreement” identified in s 170ML(2) is not simply that which the unions wished to negotiate.  There must be an agreement which would, as indicated in s 170LH, satisfy the requirements for the making of an application to the AIRC for certification.  Those requirements, to attract the jurisdiction or authority of the AIRC, include the nature of the agreement mandated by s 170LI(1).  Hence the critical nature for this case of the phrase “about matters pertaining to the relationship” between Electrolux and its employees whose employment is subject to the proferred agreement.’

 

In that case the agreement had been proferred and industrial action taken to advance claims reflected in the terms and conditions of that agreement, including the Bargaining Agents Fee term.  There is nothing in the reasoning of the majority which requires that a draft agreement must be proferred by the party taking industrial action in every case if the party is to attract the protection conferred by the Act.  To extract such a proposition from the reasoning of the Court is to elevate contextual references to the facts of the particular case to a rule of construction applicable to all cases.

64                  Gleeson CJ said (at [25]):

‘The reference in s 170ML(2) to “the proposed agreement” is a reference to an agreement of the nature identified in s 170LI.  The fact that parties to industrial action may be acting under a mistake of law as to whether a proposed agreement is of that nature is no more relevant to the protection given by s 170ML(2) than would be the fact that they neither knew nor cared whether the proposed agreement was of that nature.  The protection conferred by s 170ML(2) is attracted by a combination of two circumstances: the purpose of supporting or advancing claims the subject of a proposed agreement; and the nature of the proposed agreement.  The kind of proposed agreement being supported is not at large.  It is not merely the fact of the proposal and support that is sufficient to gain protection; the nature of that which is proposed is also material.’

His Honour identified the statutory purpose of the protection and immunity conferred by the Act as the facilitation of the making and certifying by the Australian Industrial Relations Commission of certain agreements, and continued: 

‘... that protection and immunity does not extend beyond action in support of agreements of the nature of the agreements with which Pt VIB is concerned, that is to say, agreements of the kind identified in s 170LI.’

65                  McHugh J said (at [113]):

‘... the “proposed agreement” identified in s 170ML(2) must be an agreement which would satisfy the requirements for the making of an application to the commission for certification.  Those requirements include the nature of the agreement that is mandated by s 170LI(1).’

Callinan J did not expressly deal with the point, save by stating at [239] his preference for the reasoning of the trial judge over that of the Full Court. 

66                  The judgments of the High Court in Electrolux do not require that before protected action can be taken the organisation taking it must be doing so in pursuit of, or in relation to, a proposed agreement which is, in effect, complete and capable of execution and certification.

67                  The question whether industrial action which has been taken has been taken for the purpose of advancing claims made in respect of a proposed agreement of the kind contemplated by s 170ML(2)(e) is a question of fact and law.  If it be the case that industrial action is taken to advance a discrete substantive claim which does not pertain to the employer-employee relationship, then it does not matter how comprehensively or incompletely the union has formulated proposals for other terms and conditions.  The claim advanced would itself mark the ‘proposed agreement’ as one which could not fall within the scope of the section.  For, by its inclusion, any agreement, however otherwise drafted, would not be certifiable.  If, on the other hand, the claim for which industrial action is taken is within the employer-employee relationship then the question whether the ‘proposed agreement’, including such a claim, would be within or outside the scope of the section must be determined by reference to other factors.

68                  In the present case, in my opinion, the ‘proposed agreement’ contemplated by the AMWU (Cth) at the time of the first industrial action in July, was an agreement which would have included matters of the kind set out in the particulars which accompanied its first notice of initiation of bargaining period and the amended log of claims which it provided subsequently.  The proposed agreement at the time of the industrial action in October was an agreement which would have contained matters of the kind set out in the second notice.  These included, by reference, the matters ‘already agreed between the parties’.  Those matters could be identified, at least in part, by reference to the draft agreement dated 31 August 2004. I use the term ‘matters of the kind’ advisedly to recognise that some elements of the log of claims were by way of ambit claims and would not support any inference of any serious intention or expectation of their inclusion, as framed, in a final agreement.  

69                  There is a further constructional question.  That is whether industrial action, brought to advance claims which pertain to the employer-employee relationship, is protected action notwithstanding that the agreement ‘proposed’ at that point will include matters which do not pertain to that relationship.  In my opinion, the term ‘claims made ... in respect of the proposed agreement’ imports the condition that they relate to an agreement which, so far as it goes, at that point is not disqualified from certification by reason of any of the matters with which it deals.  That is to say if there are other matters which would preclude certification whether they are to be inferred from a log of claims or otherwise, or even agreed, the claims advanced or supported will not have been made in respect of a proposed agreement of the kind contemplated by the Act.

70                  The new validation provision, s 170NHBA, focuses upon the character of the claim intended to be supported or advanced by the industrial action.  This might reflect an assumption by the parliamentary draftsman that the scope of protected action is defined by reference to the character of the claims advanced or supported, rather than the character of the proposed agreement to which they relate.  There is support for the proposition that the construction of a statute may be affected by assumptions about its construction apparent in subsequent legislation or amending legislation.  See Pearce and Geddes, Statutory Interpretation in Australia, 5^th Edition (Butterworths 2001) pars 3.30-3.32 and in particular see Grain Elevators Board (Vic) v Dunmunkle Corporation (1946) 73 CLR 70.  In this case, however, the construction of s 170ML(2) adopted by the High Court in Electrolux indicates that the character of the ‘proposed agreement’, whether it be settled or inchoate, is critical to the question whether the relevant action is protected.  That construction cannot be overcome by a statutory interpretation based upon a subsequent amendment.

71                  The practical implication of the preceding approach to the construction of s 170ML(2) may be that parties contemplating industrial action will need to consider carefully whether all the elements of their proposed agreement identified to that point, whether by a log of claims, draft agreement or otherwise, are compatible with the requirements for certification, that is to say that they pertain to the employer-employee relationship.

72                  In the light of these conclusions it is necessary to consider the contentions advanced by Premier Coal in support of the particular declarations which it seeks.

The Test for Whether a Matter Pertains to the Employer-Employee Relationship

73                  The relevant requirement of s 170LI(1) is that, in order to be certified, an agreement must be ‘about matters pertaining to the relationship between ... an employer ... and all persons who ... are employed in a single business or part of a single business of the employer’.  The connection between the ‘matters’ referred to and the employment relationship is that they must ‘pertain’ to that relationship.  The word ‘pertain’ has had a history of judicial exegesis in jurisprudence relating to the concept of ‘industrial dispute’. As pointed out in the joint judgment of Gummow, Hayne and Heydon JJ in Electrolux at [158], the definition of ‘industrial matters’ in s 4(1) of the Conciliation and Arbitration Act 1904 (Cth) was a cognate definition to that of ‘industrial dispute’ and stated that the defined term meant:

‘... all matters pertaining to the relations of employers and employees’.

This was so drawn as to reflect reliance by the parliament on s 51(xxxv) of the Constitution.  The provisions of the Workplace Relations Act with which the Court is here concerned are based upon the corporations power.  Nevertheless the parliament by using, in s 170LI, language drawn from the definition in the Conciliation and Arbitration Act 1904 may be taken to have intended the words to carry the meaning attributed to them in judicial interpretation of that provision.  It is sufficient for present purposes to refer to the salient observations in Electrolux about the requirement that a matter dealt with by an agreement ‘pertaining’ to a relationship. 

74                  In the judgment of Gleeson CJ at [9] his Honour said:

‘The established principle, however, is that, in the context with which this legislation is concerned, it is matters which affect employers and employees in their capacity as such that “pertain to the relations of employers and employees”.’

At [10] his Honour restated the well established proposition that ‘the relations of employers and employees’ refers to their industrial relationship and not to matters which have ‘an indirect, consequential and remote effect on that relationship’ – R v Portus; Ex parte ANZ Banking Group Ltd (1972) 127 CLR 353 at 359 and 362; R v Kelly; Ex parte Victoria (1950) 81 CLR 64 at 84.

75                  McHugh J at [81] said that for an agreement to be certified it must be about matters pertaining to the relationship between employers and employees ‘in their capacity as such’.  At [89] his Honour referred to ‘the test of sufficient direct effect on the employment relationship’ as ‘the key to the statutory limitation in s 170LI’.

76                  In their joint judgment, Gummow, Hayne and Heydon JJ referred at [161] to the judgment in Alcan and its acceptance of the principle in Portus that for a matter to ‘pertain to the relations of employers and employees’ it must ‘affect them in their capacity as such’.

77                  Callinan J at [241] said:

‘Whether the agreement pertains to the relationship between an employer and employee is to be objectively determined by the court.’

78                  The essential principle emerging from these judgments is that a matter pertains to the employer-employee relationship if it affects employers and employees in their capacity as such.  The term was otherwise expanded in R v Kelly at 84:

‘The words “pertaining to” mean “belonging to” or “within the sphere of” and the expression “the relations of employers and employees” must refer to the relation of an employer as employer with an employee as employee.’

It has also been said that a provision of an agreement does not pertain to the employer-employee relationship if it concerns academic, political, social and management matters – Electrolux at [60] per McHugh J and at [245] per Callinan J. 

79                  The question whether a matter affects the relations of employer and employee in their ‘capacity’ as such has the potential to generate arcane debates about characterisation particularly where a person may be affected in more than one capacity.  The Court should not be astute to propose elaborate sub-principles to guide that characterisation.  The process should be kept as simple and as straightforward as its language and judicial exegesis permits having regard to the practical consequences that may attend error.  

Whether the July Strike was Protected Action

80                  Premier Coal submitted that at the time of the July strike there was no ‘proposed agreement’ within the meaning of s 170ML(2) with respect to which any claim could be supported or advanced.  The draft document of 9 July was a draft Enterprise Agreement for registration under the State CIT and was not intended to be an agreement that complied with the requirements of s 170LI. 

81                  Premier Coal then made a fallback submission that if there were a proposed agreement relevant to the July strike and if it were the agreement proposed for registration under the CIT, then it contained matters that did not pertain to the employer-employee relationship.  A number of provisions in the 9 July draft were cited as extraneous to the relationship.  They were:

1.         Clause 3(3) relating to the application of the agreement to a proposed Char Plant.

2.         Clause 31 relating to leave and payment for attendance at union meetings.

3.         Clause 32 relating to the engagement of contractors.

4.         Clause 34 relating to union rights of entry.

5.         Clause 35 relating to redundancies.

6.         Clause 37 relating to local government representation.

82                  Premier Coal also invoked s 170MP and said that the condition imposed by s 170MP(1)(a) was not met in that the respondents had not genuinely tried to reach agreement with it.  It accepted however that negotiations undertaken before the initiation of the bargaining period were relevant to the question whether there had been a genuine attempt to reach agreement – AMIEU v G & K O’Connor Pty Ltd (1999) 91 IR 355 at 361-363 (Marshall J).

83                  The entry into force of the Workplace Relations Amendment (Agreement Validation) Act raised something of a threshold question affecting the attack on the July strike.  Assuming it could be said that one or more of the respondents arranged or engaged in the industrial action undertaken in July, the question is whether it would have been protected action but for the fact that it was undertaken for a purpose of supporting or advancing a claim that was not a permitted matter.  Premier Coal said first that the action was not protected notwithstanding the Workplace Relations Amendment (Agreement Validation) Act  because there was not in evidence a ‘proposed agreement’ being an agreement, at least in draft, capable of certification.  For the reasons already given, I reject that proposition.  No such agreement is required to attract the application of the protected action provisions of the Act.

84                  Then it is said that if there were a proposed agreement it included matters that did not pertain to the employer-employee relationship.  In my opinion, the question whether the July strike was carried out to advance or support claims in relation to a proposed agreement which could be certified is to be determined by reference primarily to the list of particulars which accompanied the Notice of Initiation of Bargaining Period on 29 April 2004, and the amended log of claims delivered on 10 May 2004. In my opinion, at that stage, the proposed agreement was inchoate.  The union intended to pursue an agreement which would include  matters of the kind referred to in its particulars and the amended log of claims subject, no doubt, to variation by reference to those matters which would be considered ambit claims.  If any of  them were not matters pertaining to the employer-employee relationship then that difficulty was overcome by the operation of s 170NHBA of the Workplace Relations Amendment (Agreement Validation) Act.  That, of course, still leaves the question whether the condition imposed on protected action by s 170MP(1)(a) has been satisfied. 

85                  Although it was baldly submitted on behalf of Premier Coal that there had been no genuine attempt to reach agreement prior to the July strike action, it is clear that the discussions which had ensued in relation to the proposal for a certified agreement under the Workplace Relations Act subsumed, and were in a sense a continuation of, the extensive negotiations over many months that had already occurred in relation to the Enterprise Agreement proposal.  The use of the draft Enterprise Agreement as the basis for the development of a certified agreement reinforces that proposition.  Given the extent of the negotiations about the Enterprise Agreement and the involvement of basically the same personnel as were involved in the discussion of the certified agreement, I am satisfied that in those circumstances, on the balance of probabilities, the relevant officers of the AMWU (Cth) had, before the strike, genuinely tried to reach agreement with Premier Coal.  That they had done so, in part, as officers of the AMWU-WA dealing with a proposed agreement under the State law, does not mean that the negotiations they undertook are to be disregarded for the purposes of the Commonwealth law.  The alternative hypothesis to the proposition that the AMWU (Cth) had tried to reach agreement with Premier Coal is the rather improbable one that for some unspecified collateral purpose unconnected with trying to advance the long standing negotiations in so far as they related to the substantive terms and conditions to be included in any agreement, the AMWU (Cth) had organised a strike.

86                  I am satisfied that the strike action in July was protected action.  I am not prepared to make the declarations sought by Premier Coal in relation to that action.

The Circumstances and Purposes of the October Strike

87                  Premier Coal accepts that there was a proposed agreement in contemplation by the AWMU (Cth) at the time of the October strike.  The terms of the October agreement were to be identified, according to Premier Coal, by reference to the drafts dated 30 and 31 August 2004 exhibited to Mr Warrand’s affidavit (PW 20, PW 26 and PW 27).  According to the submissions for Premier Coal however, the proposed agreement reflected in these drafts contains provisions not pertaining to the employer-employee relationship and for that reason is not a proposed agreement of the kind required by s 170NL(2)(e). 

88                  To the extent that the Premier Coal submissions depend upon its proposition that the existence of a certifiable draft agreement is a necessary condition of protected action under s 170NL, I reject it for the reasons already expressed.  However, on the evidence in this case, the nature of the agreement contemplated by the AMWU (Cth) at the time of the October strike can be inferred from the particulars attached to its second Notice of Initiation of Bargaining Period which was delivered on 28 September 2004.  Those particulars incorporated by reference all which had already been agreed.  They picked up those elements of the drafts already prepared in so far as they reflected the progressive provisional agreement of the parties. 

89                  Agreement having been reached on those matters, it does not follow that the AMWU (Cth) took its strike action in October to support or advance claims for the inclusion of those agreed terms and conditions in the proposed agreement.  Rather the evidence supports the inference, and I find, that the October strike was taken principally to support and advance the claims of the AMWU (Cth) in relation to the proposed rostering arrangements for maintenance workers.  Pay levels were also unresolved at that time.  These issues were mentioned by the AMWU (Cth) representatives at their meeting with the company representatives on 22 September. 

90                  I am satisfied that the strike was carried out to support or advance claims made in respect of the proposed agreement that clearly pertained to the employer-employee relationship, namely claims relating to rostering and pay levels. 

91                  For the reasons set out earlier in the general discussion of the requirements of protection action, the question remains whether the ‘proposed agreement’ in October would have included matters that did not pertain to the employer-employee relationship.  A substantial part of the argument in this case involved the contention that the proposed agreement would have included matters not pertaining to the employment relationship.  The fact that those matters were elements of the proposed agreement, reflected in the August drafts prepared by Premier Coal, was not in contention.  What was in contention was whether they pertained to the employer-employee relationship.  It is convenient to deal with each of them in sequence.

92                  The process of characterisation should not require close parsing of the wording of the drafts.  The ‘proposed agreement’ has not crystallised into a final draft.  It can be assumed that, to the extent that detailed phrasing and redrafting might take a proposed clause out of the area of invalidity for the purposes of certification, it is likely to be addressed before final settlement of the terms.  This means that characterisation is addressed principally to the subject matter of the provisions in issue rather than their precise terms.  This is consistent with the form of the requirement for certification in s 170LI(1) in that the agreement is to be about ‘matters’ pertaining to the employer-employee relationship.  I turn now to consideration of the matters in contention.

 

 

The Char Plant

93                  The draft certified agreement of 31 August 2004 set out in cl 3 the scope of the agreement and the parties bound by it.  It contained an acknowledgement that Premier Coal might construct and operate a Char Plant on the mining lease and expand existing facilities.  It provided for negotiation of a separate agreement applicable to employees in any pilot Char Plant and any Char Plant producing over 100,000 tonnes or more of char annually.  In that respect a separate agreement would be negotiated applicable to employees at that place. 

94                  Premier Coal submitted that this claim did not apply to employees covered by the proposed agreement which covers employees identified in cl 3(1). 

95                  There is a real question whether the clause would have any legally enforceable operation.  In any event, in my opinion, it deals with the limits of application of the agreement under current negotiation.  The exclusion of certain classes of future employee and activities from the agreement is part of the definition of its scope.  On that basis,  the Char Plant provision is a matter which pertains to the employer-employee relationship by the global definition of its scope.  Alternatively, I would regard it as ancillary to the substantive provisions of the agreement.

Union Meetings – Clause 32

96                  Clause 32 contains a number of subclauses which deal with various matters under the heading ‘Union Meetings’.  Matters it deals with are:

1.         Rights of employees who are union members to attend various kinds of union meetings and to be paid for their attendance (cl 32(1), (2) and (3)).

2.         The rights of employees who are elected officials and/or delegates of the union to attend union board of management meetings without loss of pay (cl 32(4)).

3.         The rights of employees who are union representatives to attend union approved training courses without loss of pay (cl 32(5)).

4.         Attendance by employees as union representatives at management/union representative meetings (cl 32(6)).     

These provisions set out circumstances in which employees may be absent from their duties and yet still be paid while they attend various kinds of union meetings including board of management meetings, management/union discussions and union organised training and education courses.  They establish for the most part an entitlement to paid leave for employees who are performing certain functions with the relevant union.  The hours of an employees’ availability for work and the conditions under which an employee may be absent from that work and whether or not he or she can be paid during that absence, in my opinion, lie at the heart of the employer-employee relationship.  They affect employer and employee in their capacities as such.

97                  It is no answer to that proposition to say that these provisions affect employees in their capacity as union members.  So much may be correct, but if the provision in question also affects the employment relationship in a direct way that is neither consequential nor remote it pertains to the employer-employee relationship.  Argument by reference to the multiple capacities of employees can lead into a morass of fine distinction.  So maternity leave, leave to perform jury service and leave to train in the military reserve may all be said to attach to people in their capacities as parent, citizen, military reservist respectively.  In my opinion, the provisions of such clauses pertain to the employment relationship.

98                  An early consideration of leave provisions arose in R v Commonwealth Court of Conciliation and Arbitration and the Merchant Service Guild of Australia; Ex parte Allen Taylor & Company Ltd (1912) 15 CLR 586.  Griffith CJ said (at 602):

‘I do not think that the direction to allow absence on full pay is beyond the jurisdiction of the Court.  Such leave is a matter relating to terms of service and whether the absence is of one day in a week or in a month, or of a month in a year, seem to be a question and not a principle to a degree.’

Much later in R v Industrial Commission (SA) Ex parte Fire Brigade Board (1977) 15 SASR 546, Bray CJ said (at 549):

‘In short the periods for which and the circumstances under which an employee may still be entitled to his wages under the contract of employment, notwithstanding his absence from work, seem to me to be matters pertaining to the employer/employee relationship on its narrowest construction.’

In Robe River Iron Associates v Amalgamated Metal Workers and Shipwrights Union of Australia (1987) 19 IR 112, Brinsden P said (at 194):

‘... a paid union meeting of the type now under discussion is a matter which is connected with the relationship between an employer in his capacity as an employer and an employee in his capacity as an employee in a way which is direct and not merely consequential.’

And further (at 114):

‘I am not able to make any intelligent distinction between leave of absence granted for the purpose of attending a union meeting with leave of absence for  a public holiday, paid sick leave or absence through bereavement, all of which are authorised absences pursuant to cl 18(6) of Industrial Agreement No 10 of 1979 made between the parties which is still in force and primarily governs mutual conditions of employment.’

Olney J at 126 rested upon the special role accorded to the unions in that case in connection with the employers’ relationship with employees.  This, he said, provided:

‘... complete justification to conclude that the attendance by those members at union membership and shop stewards’ meetings has a relevant connection with the employment relationship of the appellant and its employees.’

This approach, with respect, placed the characterisation of leave on, what is in my opinion, an unduly narrow basis and one which suggested some underlying principle which may be difficult to formulate and apply.

99                  It was submitted, as a relevant consideration, that the employer gains no benefit from provisions such as those in cl 32 of the 31 August draft.  A benefit test is of questionable utility, in this context, in determining whether a matter pertains to the employment relationship.  It could be said that there is no benefit to an employer in giving employees any leave at all.  Yet ‘leave’, under whatever conditions it may be awarded, and to whatever subset of employees it may be accorded, is part of a consideration moving from the employer in return for which the employees make a commitment to provide their services. 

100               A question remains whether cl 32(1) is in a different category because it encompasses the possibility of payment to employees who are not on roster to attend union meetings.  It may be said that an employee who is rostered off does not thereby cease to be an employee.  It seems however that he or she is in his or her own time.  The provision to such an employee of a payment for attending a union meeting at the same time as those who are given leave from their rosters to do so may be seen as payment to that person other than in their capacity as an employee.  Alternatively, it is arguably part of the consideration paid to him or her for the commitment to provide the employer with the requisite services. 

101               The Australian Council of Trade Unions (ACTU) submits that there is no evidence about how cl 32(1) will operate in a practical sense.   If, on its proper construction, it provides a mechanism for the maintenance of a skeleton crew at the time of the union meeting while other employees are rostered off to attend then, taken as a whole, the provision pertains to the relationship as a combination of leave and the assurance of a skeleton crew.  This however is speculative and is not of much assistance to the characterisation of the provision.

102               In the Robe River case, Brinsden J did observe, albeit obiter, as it was conceded that the relevant clause would not be applied in this way (at 113):

‘...as at present advised I would not have though it within the jurisdiction of the Commission to make an order against an employer obliging it to pay union members who attend union meetings held during times those members are not rostered for duty with the employer.’

In the end in my opinion the better view is that such payments do not pertain to the employment relationship.  While they are paid to a person in that person’s capacity as an employee, they are paid in a context and for purposes extraneous to the employment relationship.  This is essential a judgment of degree.  In my opinion, however, the provision goes beyond the boundary of what pertains to the employment relationship.

103               It is important to bear in mind the general approach to characterisation discussed earlier.  The character of the provisions of the draft agreement and the matters to which they relate are not to be determined by careful parsing of their provisions.  They, at best, reflect provisional agreements between the parties that may or may not  undergo further refinement.  In my opinion, the matters dealt with in cl 32, save for that in cl 32(1) are properly characterised as concerning leave and payments to employees to attend meetings and training courses in various capacities and various ways.  Clause 32(1) however does involve a matter which does not pertain to the employment relationship.  On that ground the proposed agreement relevant to the October industrial action was not an agreement capable of certification.

Clause 33 – Utilisation of Contractors

104               Clause 33 includes provisions which would impose restrictions or qualifications on the use by the employer of independent contractors.  Subclause 33(4) provides, inter alia:

‘(4)      Agreements to apply

(a)       Contractors shall not be used by the Employer to reduce the number of employees primarily engaged in operations or maintenance work.

(b)       Where the Employer determines there is an operational requirement over and above the capacity of the existing workforce the following approach will be undertaken:

            (i)         the Employer will consult with the employees and Union representatives and discuss the most cost and time effective method of carrying out the work to meet the operational demands;

            (ii)        the work will be undertaken through methods including but not limited to one or more of the following:

                        A.         use of fixed term employees from the local area;

                        B.         overtime work; or

                        C.        use of contractors.’

Paragraph 33(4)(c) sets out minimum terms for contractors’ employees where a contractor is used.

105               Clause 33(6) is designed to limit the use of contractors to carry out warranty work on equipment.  Subclause 33(6)(b) provides:

‘Prior to any off-site contractor being engaged to carry out any warranty work the Employer’s personnel are to be given a reasonable opportunity to carry out an inspection of the machine or component in question for the purpose of identifying the problem.’

There is also a requirement that the union be notified of the employer’s intention to engage a contractor for work related to ‘the preparation for and mining of coal’.  The notification is to contain details about the contractor and the nature and timing of the work to be carried out.  It would also have to include a statement that unless an objection is raised under cl 33 the employer may engage the contractor.  The nature of objections which may be raised by the union is not specified.  Clause 33(11) requires the employer to notify employees of the entry of a contractor to areas where employees are working.  Clause 33(13) requires maintenance of equipment ‘dry hired’ by the employer to be performed by the employees. 

106               In R v The Judges of the Commonwealth Industrial Court; Ex parte Cocks (1968) 121 CLR 313, the High Court held that a dispute between employer and employees about the use of independent contractors to do work outside the factory or workshop was not a dispute of an ‘industrial matter’.  An award prohibiting the use of such contractors was not within the power of the Commonwealth Conciliation and Arbitration Commission to make.  Barwick CJ, Taylor and Owen JJ did not accept that the relevant clause was ancillary to the control and preservation of the terms and conditions of employment of members of the union or that it was competent for the Arbitration Commission to regulate employers in relation to any labour in competition with that of the disputants or a substitute for it.  Their Honours said (at 318):

‘... if this be so it is difficult to see why the Commission may not, where it is thought to be necessary or desirable in the interests of employees in a particular industry, forbid or regulate practices having no connexion with the relationship of master and servant in the industry which may be thought to operate detrimentally to the interests of employees.’ 

And (at 320):

‘The question whether the practice of employing independent contractors in any particular industry is undesirable and should be forbidden or regulated is a matter for the appropriate legislature or legislatures and not for the Commission.’

107               A distinction has been drawn between provisions regulating or prohibiting the use of independent contractors and provisions which prescribe minimum terms and conditions for the employees of independent contractors.  The distinction was drawn in R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470.  Gibbs J observed that an award could properly require that the employee of any contractor engaged by the employer be engaged on the same terms and conditions as those applicable to the employees of the employer under the award.  His Honour distinguished Cocks and said (at 473):

‘... the present dispute ... is not as to whether contractors should be engaged, but as to whether, if they are engaged, their employees should be entitled to the benefits of the award, assuming that one is made.  The evidence has failed to show that in the circumstances prevailing in the industry in question such a clause could not be capable of being regarded as merely incidental to the settlement of the dispute as to the conditions of employment of workers in or in connexion with metaliferous mining.’

He agreed, however, with the view of Jacobs J in the same case that the question should not be finally determined until the facts were explored – see Jacobs J (at 478).

108               In Construction, Forestry, Mining & Energy Union v Mount Thorley Operations Pty Ltd  (1997) 79 FCR 96, Moore J held a prohibition on the engagement of independent contractors not to be a valid provision of a certified agreement.  After referring to Cocks his Honour said (at 108):

‘It is comparatively plain that their Honours took the view that the regulation of the manner in which independent contractors performed work, apart from any prohibition on them doing so, was not a matter pertaining to the relations of employers and employees.’

His Honour found that the clause before him was effectively a prohibition on the engagement of independent contractors.  He was constrained to give effect to the views of Barwick CJ, Taylor and Owen JJ in Cocks.  He said (at 110):

‘Accordingly I should treat cl 37(b) as a provision which does not pertain to the relationship between employers and employees even though, in a direct and practical sense, it plainly does.’

109               In my opinion, cl 33 makes clear that the proposed agreement in this case was to include provisions restricting or qualifying the employer’s right to use independent contractors.  Having regard to the basic test set out in Electrolux that a matter pertaining to the relationship between employer and employees will affect them in their capacities as such, I am of the opinion that cl 33 imports into the proposed agreement a discrete matter which does not pertain to that relationship.  It is not merely ancillary, but substantive and distinct.  Having regard to Cocks and the observations of Moore J in Mount Thorley Operations, I am of the opinion that on this ground the proposed agreement is not an agreement of the kind required by s 170LI.

Clause 35 – Right of Entry

110               The clause as set out in the draft agreement dated 31 August 2004 (PW 27) provides:

‘The right of entry of Union Representatives onto the worksite shall be in accordance with Part IX, Division 11A of the Workplace Relations Act 1996 (Cth) as amended from time to time.’

111               In my opinion this clause does no more than indicate the intention of the parties that right of entry in relation to the agreement will be as provided for in the Act.  It merely draws attention to the application of those rights and does not create any additional rights and obligations.  It is declaratory in nature and in that sense ancillary to the other provisions of the agreement.  It might be that it could be called in aid by the employer to resist any construction of other provisions of the agreement that might arguably support specific additional rights of entry for particular purposes.

112               The right of entry clause in this form would not, in my opinion, prevent the proposed agreement from being certified under the Act.

Clause 36 – Redundancies

113               Clause 36 would prohibit the employer from implementing a redundancy program for three  years from the commencement of the agreement.  The prohibition does not apply if the employer is unable to maintain its volume of contracted coal sales, at greater than 3.2 million tonnes per year, in the three year period from the commencement of the agreement.  The balance of the clause relates to the terms and conditions of any redundancy packages and the mode of their implementation.

114               Premier Coal referred to and relied upon R v Kelly.  But that case concerned the power of the Commonwealth Conciliation and Arbitration Commission to prescribe, in an award, the trading hours of shopkeepers who were parties to the award.  The High Court held (at 84):

‘[t]he time at which a shopkeeper (who may or may not employ anybody) might open and close his shop is not a ‘matter’ which belongs to or is in the sphere of the relation of that shopkeeper as employer with any person as employee.’

115               In my opinion, the decision in R v Kelly is of little assistance to Premier Coal.  The redundancy clause does pertain to the relationship between employer and employee.  It applies directly to protect each employee against the termination of his or her employment by the application of a redundancy program.  That prohibition is lifted in the event that sales fall below a certain level.  That does not involve any purported control of the management of the employer’s business.  The security of tenure, as against redundancy, which the clause offers, lies at the core of the employer-employee relationship.  The balance of the clause goes to the terms and conditions of redundancy packages and also plainly pertains to that relationship.

116               The proposed agreement would not be disqualified for certification by reason of cl 36.

Clause 37 – Local Government Representation

117               This clause would allow employees who are elected local government representatives to be absent from work to attend scheduled local government meetings.  This is, in effect, a leave provision.  For the reasons, which I have already discussed in relation to union meetings, it pertains to the employment relationship. 

Contravention of Section 170NC

118               The prohibition in s 170NC requires, inter alia, that a person not take or threaten to take any industrial action with intent to coerce another person to agree to making an agreement. 

119               Premier Coal points to the AMWU (Cth) as authorising and organising the industrial action taken against it in October 2004.  It relies upon the service by the AMWU (Cth) of the Notice of Intention to take that action.  That notice, dated 1 October 2004, stated the intention of the union ‘to take industrial action’.  It was signed by the President, Mr Saunders.

120               In Mr Warrand’s evidence he referred to a meeting of 22 September 2004 attended by Messrs. Kearney, Waywood, Sanford and Kent, representing the AMWU (Cth).  At that meeting, the Premier Coal roster proposal was rejected and the meeting was informed by the AMWU (Cth) that the members had decided to take industrial action.  Mr Warrand did not say in his affidavit who made the statements.  Rather he attributed them to the AMWU (Cth). 

121               The second Notice of Initiation of Bargaining Period received on 28 September 2004 was signed by Mr Ferguson.  It was, clearly enough, setting the scene for the initiation of industrial action if agreement could not be reached.  By reason of Mr Ferguson’s involvement and his office as secretary of the AMWU (Cth), I am prepared to infer on the balance of probabilities that he was involved in and party to the taking of industrial action against Premier Coal in October. 

122               I take the same view of Mr Edmonds who personally delivered the first Notice of Intended Industrial Action to Premier Coal in July and who is an officer of the union who provides legal advice to it.  I infer from his position, his role and his earlier conduct in delivering the July notice that he was a party to the taking of the industrial action in October.

123               In relation to the other shop steward respondents mentioned, although they participated in meetings with Premier Coal, I am not satisfied that the evidence will allow me to draw any reliable inference as to what, if any, role any of them may have played in the authorisation or organisation of the October strike.   While Mr Kearney’s statements to Mr Warrand and Mr Allen about the receipt of the Clayton Utz letter were suggestive of his participation they did not, given his level within the union, unequivocally support the inference that he was an actor in the organisation and initiation of the industrial action. I am not prepared to make any declaration that the shop stewards have engaged in the industrial action in question so as to contravened s 170NC.

124               I have no doubt that the object of all of the officers of the union who organised and were party to the October strike was to endeavour to coerce Premier Coal to make an agreement along the lines of what had been provisionally agreed to that point and which would not put mining operators and maintenance employees on the same rostering arrangements.  In my opinion therefore, the AMWU (Cth), Mr Saunders, Mr Ferguson and Mr Edmonds took and threatened to take industrial action with which to coerce Premier Coal into making an agreement under Div 2.  There will be a declaration accordingly.

Conclusion

125               At the present time the outstanding questions that remain to be determined are whether any, and if so what, damages may be payable to Premier Coal and what, if any, penalties should be imposed.  Although I have yet to hear from the parties on the question of penalties I should indicate that, having regard to my findings about the circumstances in which the October strike was undertaken, I would need to be persuaded to impose any in this case.

126               The claims which the union sought to support and advance in the October strike were matters relating to the employer-employee relationship.  They concerned rostering arrangements which had been a bone of contention between the parties for some time.  The protection which the union and its officers no doubt thought they enjoyed pursuant to the provisions of s 170ML was unavailable because of provisions in the proposed draft agreement to which it seems both they and Premier Coal had agreed.  The effect of the Electrolux decision is to make clear that certain of those provisions would render a proposed agreement containing them incapable of certification and therefore not a ‘proposed agreement’ for the purposes of s 170ML(2)(e).  Provisionally I am of the view that in the circumstances it would be difficult to justify a punitive response to the respondents’ conduct.  However, it is a matter upon which the parties may make submissions in due course.

127               The question of compensatory damages is a matter which I hope the parties can resolve in a spirit of pragmatic reconciliation.  Against the event that they cannot, the proceedings will be listed for further directions relating to assessment of damages and penalties and any other relief on 11 January 2005 at 10.15am.

I certify that the preceding one hundred and twenty-seven (127) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

Acting Associate:

Dated:              23 December 2004

Counsel for the Applicant:	Mr  F Parry QC with Mr AJ Power
Solicitor for the Applicant:	Clayton Utz
Counsel for the  Respondents:	Mr SC Rothman SC with Mr JH Pearce
Solicitor for the Respondents: Counsel for the Minister for Employment and Workplace Relations Intervening: Solicitor for the Minister for Employment and Workplace Relations Intervening: Counsel for the Australian Council of Trade Unions	Taylor & Scott Mrs EG Hartley Freehills Mr A Watson
Date of Hearing:	4, 5 and 11 November 2004
Date of Last Written Submissions:	15 December 2004
Date of Judgment:	23 December 2004