FEDERAL COURT OF AUSTRALIA

Pacific National (NSW) Pty Limited v Australian Rail, Tram & Bus Industry Union [2005] FCA 1492

INDUSTRIAL RELATIONS – negotiations for proposed enterprise agreement – further notice of intention to take industrial action – further application for interlocutory orders restraining the respondent from proceeding with industrial action – whether there is a serious question to be tried – whether draft agreement makes clear the terms intended to bind the parties upon certification – effect of notations seeking to limit claims to matters capable of being included in an agreement to be certified – whether clause relating to the employment of contract labour or labour hire agency employees pertains to employer/employee relationship.

Workplace Relations Act 1996 (Cth) s 170LI

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

Finance Sector Union of Australia v Commonwealth Bank of Australia [2005] FCA 796 referred to

Wesfarmers Premier Coal Ltd v Automotive Food, Metals, Engineering, Printing and Kindred Industries Union (No 2) (2004) 138 IR 362 discussed

PACIFIC NATIONAL (NSW) PTY LIMITED ACN 099 150 688 AND PACIFIC NATIONAL (ACT) PTY LIMITED ACN 052 134 362 v AUSTRALIAN RAIL, TRAM & BUS INDUSTRY UNION

NSD 1613 of 2005

BRANSON J

15 OCTOBER 2005

SYDNEY

THE COURT ORDERS THAT:

UPON THE FIRST AND SECOND APPLICANTS UNDERTAKING BY THEIR COUNSEL:

(a)        to submit to such order (if any) as the Court may consider to be just for the payment of compensation to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order or undertaking or any continuation (with or without variation) thereof; and

(b)        to pay the compensation referred to in (a) to the person there referred to,

THE COURT ORDERS THAT:

1          The respondent shall not (whether by itself, its servants or agents), until further order, commence, continue, engage in or threaten to engage in any industrial action, any strike, any stoppage of work or any other ban on the performance of work by members of the respondent whose employment is subject to the Pacific National Enterprise Agreement 2004 (the certified agreement) between 6.00am on 18 October 2005 and 6.00am on 19 October 2005.

2          The respondent shall not (whether by itself, its servants or agents), until further order, direct, procure, advise or authorise any employees of the applicants whose employment is subject to the certified agreement to stop performing work between 6.00am on 18 October 2005 and 6.00am on 19 October 2005.

3          The respondent shall before 10.00am on 17 October 2005:

(a)        discontinue and withdraw all authorisation and advice for the taking of industrial action or any stoppage of work between 6.00am on 18 October 2005 and 6.00am 19 October 2005;

(b)        advise its members whose employment is subject to the certified agreement:

(1)        of the making of these orders,

(2)        that they should not take industrial action between 6.00am on 18 October 2005 and 6.00am 19 October 2005; and

(3)        that they should attend for their rostered shifts between 6.00am on 18 October 2005 and 6.00am 19 October 2005;

                        by the following means

(1)        notice on official RTBU letterhead to be posted on notice boards at the premises’ of the applicants so far as practicable; and

(2)        email or telephone notification to all delegates so far as practicable.

4          Service of these orders on the respondent shall be effected if a copy of these orders are;

(a)        faxed to the registered National Office of the respondent; and/or

(b)        handed to an officer of the respondent; and/or

(c)        faxed to Phillip Pasfield, Partner of Slater and Gordon Lawyers Sydney.

5          The notice of motion dated 14 October 2005 be otherwise stood over for consideration by Madgwick J.

6          Liberty to apply on short notice.

REASONS FOR JUDGMENT

introduction

1                     This application for a number of interlocutory orders, including interlocutory orders restraining industrial action threatened for 18‑19 October 2005, is made in the following circumstances.

2                     On 27 September 2005 Tamberlin J published reasons for judgment for confirming with some variations orders dated 21 September 2005 made by him ex parte.  His Honour’s orders, amongst other things, restrained the respondent from engaging in industrial action foreshadowed to take place between 6:00 am on 23 September 2005 and 6:00 am on 28 September 2005.  Additionally, orders 4 and 5 of the orders made by his Honour provided:

‘4.        The Respondent (whether by itself, its servants or agents) shall not, until the hearing and determination of this proceeding or further orders, engage in or threaten to engage in any industrial action, any strike, any stoppage of work or any other ban on the performance of work or counsel, procure or induce employees of the Applicants whose employment is subject to the certified agreement [ie the Pacific National Enterprise Agreement 2004] to so engage in industrial action in support of an agreement containing a provision prohibiting the displacement of full time employees by contract labour or labour hire agency employees.

5.                  The Respondent (whether by itself, its servants or agents) shall not, until the hearing and determination of this proceeding or further order, engage in or threaten to engage in any industrial action, any strike, any stoppage of work or any other ban on the performance of work or counsel, procure or induce employees of the Applicants whose employment is subject to the certified agreement to so engage in industrial action in support of an agreement containing a provision continuing the application and operation of undescribed and unidentified local agreements, customers or practices or other arrangements.’

3                     On 23 September 2005 the respondent served each applicant with a notice of initiation of bargaining period.  These notices were subsequently withdrawn and on 27 September 2005 replaced with two further notices of initiation of a bargaining period in substantially identical terms (‘the Bargaining Period Notices’).  The Bargaining Period Notices advised that the respondent intended to try to make an agreement with the applicants and others to replace the Pacific National Enterprise Agreement 2004 and to have any agreement so reached certified under Division 4 of Part VIB of the Workplace Relations Act 1996 (Cth) (‘the WRA’). 

4                     The Bargaining Period Notices each contained the following notation:

‘[Note: to avoid doubt, the matters proposed to be covered by the agreement are intended by the RTBU to be limited to, and shall only include, matters which pertain to the relations of employers and employees and which are capable of being included in an agreement to be certified under the WRA: Electrolux Home Products Pty Ltd v Australian Workers Union [2004] 133 IR 49 [2004] HCA 40.]’

5                     On 26 September 2005 the respondent served on the applicants a document entitled ‘Draft Pacific National Enterprise Agreement, 2005’ (‘the Draft Agreement’).  Immediately above the table of contents of the Draft Agreement the following words appear:

‘To avoid any doubt, the matters proposed to be covered by the agreement and contained in this draft agreement are intended by the RTBU to be limited to, and shall only include, matters which pertain to the relations of employers and employees and which are capable of being included in an agreement to be certified under the WRA: Electrolux Home Products Pty Ltd v Australian Workers Union [2004] 133 IR 49 [2004] HCA 40.  Should any claim raise any doubt in this regard it shall be read down or served, accordingly.’

6                     On 12 October 2005 the respondent served on each of the applicants a notice of intention to take protected industrial action for the purpose of supporting and advancing the claim for a proposed agreement to be certified under the WRA.  The particulars given of the proposed action was that, with a limited exception, all employees who are members of the respondent will be asked to cease work for a period of 24 hours commencing at 6:00 am Tuesday, 18 October 2005 and concluding at 6:00 am Wednesday, 19 October 2005.

the draft agreement

7                     The submissions made on behalf of the applicants in support of their claim for interlocutory relief have concentrated on provisions of the Draft Agreement, namely cll  7, 8, 16.1, 16.5 and 26.1.  Those provisions are in the following terms:

‘7         Application

7.1              This Agreement shall prevail over any awards or certified agreements which bind Pacific National (to the extent that those awards or certified agreements are inconsistent with this Agreement.

7.2              [local agreements to be remedied and wording to be provided at a later date]

8                    Safety Net Award

8.1              The parties agree to seek to make an Award of the Australian Industrial Relations Commission, to be known as the Pacific National – RTBU Award.  The Pacific National – RTBU Award will be based on the National Rail Corporation Award, 2001.

…

16        Use of Contract Labour and Labour Hire Agencies

16.1          Pacific National shall use its best endeavours to ensure that contract labour or labour hire agency employees shall not be used to displace full time employees or their positions; contract labour or agency labour shall normally be utilised as supplementary labour to cover peak demand, unplanned or extended leave, special programmes / projects, identified skill shortages or wherever else reasonable [sic] required by the needs of the business.

…

16.5          The Unions acknowledge that it is not the intention of this Clause to restrict Pacific National’s right to engage contract [sic] and/or labour hire agencies.

…

26        Salary Packaging

26.1     Salary packaging is available for employee contributions into a superannuation fund of their choice (subject to the rules of the fund to which the contribution is to be made).

Salary packaging will also be made available for leasing motor vehicles.  This provision will not be available for implementation until the following implementation pre‑requisites have been satisfied :

(a)               Management systems have been established;

(b)               A suitable provider identified and put in place;

(c)               Administrative support process [sic] are developed; and

(d)               An employee education process has been designed and conducted.

The conditions applying and processes associated with salary packaging for superannuation and for leasing motor vehicles shall be specified in Pacific National policy.’

8                     The applicants acknowledge, with respect to cl 7 above, that on 6 October 2005 the respondent provided to them a schedule of the ‘local agreements’ that the respondent intended to be referred to in subcl 7.2 and copies of those agreements.  The schedule contained the following notation:

‘[Note: to avoid any doubt, the matters proposed to be covered by the agreement are intended by the RTBU to be limited to, and shall only include, matters which pertain to the relations of employers and employees and which are capable of being included in an agreement to be certified under the WRA: Electrolux Home Products Pty Ltd v Australian Workers Union [2004] 133 IR 49 [2004] HCA 40.  Accordingly to the extent necessary, the local agreements included in this schedule should be read as subject to this overriding condition.  Every effort has been made to vet the local agreements of clauses which might be regarded as “non‑pertaining”.  The urgent advice of any contrary view which Pacific National might have in this regard is invited.]’

9                     Clause 8 above is in identical terms to cl 8 of the draft agreement to which Tamberlin J gave consideration except that the earlier draft of cl 8 contained the notation:

‘[Agreed in principle, subject to advice regarding other unions.]’

10                  In my view, if the applicants entertained concerns about cl 8 of the draft agreement they were obliged to raise those concerns before Tamberlin J.  I do not propose to give further consideration to cl 8.

11                  Subclause 16.1 above is in identical terms to subcl 16.1 of the draft agreement to which Tamberlin J gave consideration except for the introductory words ‘Pacific National shall use its best endeavours to ensure that.’  Subclause 16.5 of the draft agreement to which Tamberlin J gave consideration read as follows:

‘The Unions acknowledge that, subject to clause 16.1 above, it is not the intention of this clause to restrict Pacific National’s right to engage labour from contractors/and/or labour hire agencies.’

12                  Subclause 26.1 of the draft agreement is in identical terms to subcl 26.1 of the draft agreement to which Tamberlin J gave consideration. 

13                  As with cl 8, if the applicants entertain concerns about these clauses they were obliged to raise those concerns before Tamberlin J.  I do not propose to give further consideration to subcl 16.1 or subcl 26.1.

serious question to be tried

14                  The applicants have identified the serious question to be tried as whether the Draft Agreement is an agreement that meets the description in s 170LI of the WRA; that is relevantly whether the Draft Agreement is an agreement about matters pertaining to the relationship between an employer and its employees.  It is uncontentious that this question calls for consideration of the judgment of the High Court in Electrolux Home Products Pty Ltd v Australian Workers’ Union (2004) 209 ALR 116 (‘Electrolux’).  In Electrolux the majority of the High Court held that an agreement that contains terms extraneous to the relationship between the employer and its employees is not an agreement of the kind identified in s 170LI and thus does not fall within the scheme of Part VIB of the WRA (see Gleeson CJ at [16], McHugh J at [111] and Gummow, Hayne and Heydon JJ at [164]‑[166]).

15                  Tamberlin J was persuaded to make the orders dated 21 September 2005, which he later varied to a limited extent only, because his Honour identified on the evidence and submissions before him, the following serious questions to be tried:

1.                  whether, in view of the terms of cl 7, the draft agreement before his Honour met the requirements of s 170LI of the WRA in that, if it were certified, it would not contain all of the terms that were to bind the parties as a result of the certification; and

2.                  whether cl 16 of the draft agreement before his Honour concerned a matter that is not a matter pertaining to the employer/employee relationship.

16                  The circumstances in which this application comes before me render it even more important than usual that I should not depart from the approach adopted by Tamberlin J unless I am persuaded that his Honour’s approach was clearly wrong.

balance of convenience

17                  The applicants re‑read on this application the affidavit which persuaded Tamberlin J that, having found a serious question to be tried, the balance of convenience favoured the grant of an interlocutory injunction.  The applicants also read a further affidavit which gave consideration to the particular harm that the applicants could be expected to suffer if the industrial action now foreshadowed were to proceed.  The respondent placed no evidence before the Court.  It did not argue against the proposition that, if a serious question to be tried were identified, the balance of convenience would favour the grant of an interlocutory injunction.

18                  It is thus only necessary for me to give consideration to the issue of whether the applicants have demonstrated a serious question to be tried that the proposed industrial action will not be ‘protected action’ within the meaning of the WRA.

consideration

19                  I turn first to consider the effect of the notations included in the Draft Agreement which indicate an intention in the respondent to limit its claims to matters capable of being included in an agreement to be certified under the WRA.  Counsel for the respondent argued that if the applicants dispute that any particular matter included in the Draft Agreement is a matter capable of being included in a certified agreement they can raise the issue with the respondent and an accommodation sought to be achieved.

20                  In giving consideration to whether the material before him disclosed a serious question to be tried, Tamberlin J placed reliance on observations made by Merkel J in Finance Sector Union of Australia v Commonwealth Bank of Australia [2005] FCA 796 at [74]‑[80] (‘FSU v CBA’).  In FSU v CBA at [80] Merkel J concluded:

‘In my view, subject to a probable exception in respect of facilitative provisions, it is an implicit requirement of the statutory provisions to which I have referred that the agreement being certified contain all of the terms that are to have effect as a certified agreement as a result of the certification.  That construction gives effect to the purpose of the relevant provisions, is reasonably open and should be adopted.’

21                  In my view, there is, at the least, doubt as to the efficacy of the notations.  Whether or not a matter is capable of being included in a certified agreement is a question of law and not a matter of agreement.  The effect of the notations is arguably to render uncertain the content of the agreement that the respondent wishes to reach with the applicants, and thereafter have certified.  For this reason, in my view, the first of the serious questions to be tried identified by Tamberlin J continues to attend the Draft Agreement; that is, the question of whether the Draft Agreement makes clear the terms intended to bind the parties upon its certification. 

22                  I note that in Wesfarmers Premier Coal Ltd v Automotive Food, Metals, Engineering, Printing and Kindred Industries Union (No 2) (2004) 138 IR 362 (‘Wesfarmers’) French J at [66]‑[68] expressed views that could be thought to be in conflict with the views expressed by Merkel J in FSU v CBA at [80].  This is not, of itself, sufficient to prevent a serious question to be tried arising.  Additionally, there is a distinction between identification of the subject matter of obligations intended to be created and the precise content of those obligations.  I doubt that French J intended his expression of view that protected industrial action may be taken for the purpose of advancing claims in respect of a proposed agreement which is not complete and capable of execution to extend to a proposed agreement the intended subject matter of which is uncertain.

23                  With respect to subcl 16.1 of the draft agreement before him, Tamberlin J placed reliance on the decision of French J in Wesfarmers.  In Wesfarmers French J gave consideration to a proposed agreement which included the following provisions as part of subcl 33(4):

‘(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.’

24                  After giving consideration to Electrolux and other authorities French J in Wesfarmers at [109] concluded:

‘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 … I am of the opinion that on this ground the proposed agreement is not an agreement of the kind required by s 170LI.’

25                  The respondent has emphasised the terms of the proposed subcl 16.5; that is, that cl 16 is not intended to restrict the employer’s right to engage contract and labour hire agencies.  However, subcl 16.1 is intended to impose on the employer an obligation to ‘use its best endeavours to ensure that contract labour or labour hire agency employees [are] not … used to displace full time employees or their positions.’  There is, in my view, a serious question to be tried as to whether the obligation imposed by subcl 16.1 constitutes a provision that restricts or qualifies the employer’s right to use independent contractors – notwithstanding the language of subcl 16.5.  Even if it be assumed that subcl 16.5 is intended to refer to the employer’s right to engage contract labour and/or labour hire agencies, it is open to be argued that the qualification on the operation of cl 16 created by that subclause would not obviate the obligations imposed on the employer by subcl 16.1 and that such obligations are a restriction or qualification on the employer’s right to engage independent contractors.

conclusion

26                  For the above reasons, I conclude that the applicants are entitled to interlocutory relief in respect of the industrial action proposed by the respondent on the ground that it would not be ‘protected action’ within the meaning of the WRA.

27                  Other issues raised by the notice of motion of 14 October 2005 should, in my view, be stood over for consideration by the docket judge.

Associate:

Dated:              21 October 2005